Tokyo, Japan (BBN)-Shares in Japan soared by more than 4.5 per cent early on Monday as the dollar strengthened against the yen.
Last week, the dollar fell to a 15-month low against the yen and the Nikkei index lost more than 11 per cent, reports BBC.
On Monday, however, the dollar rose to 113.38 yen from 113.25 yen on Friday in New York.
The rise in shares came despite official numbers showing Japan’s economy had contracted by 0.4 per cent in the three months to December.
The quarter-on-quarter figures were worse than expected, but investors seemed to shrug off the news.
The benchmark Nikkei 225 was up 4.8 per cent to 15,665.64 points in late morning trade.
Last week, Japan’s markets traded sharply lower as a stronger yen against the dollar hurt the country’s big exporters.
On Friday the Nikkei index closed down 4.85 per cent to 14,952.61 points – below the level of 15,000 points and its lowest close since October 2014.
But a retreat of the yen on Monday saw shares in the country’s big exporters trading sharply higher.
Toyota and Nissan were both up more than 5.5 per cent, Honda was up nearly 5 per cent, as were shares in Sharp and Sony.
Analysts said the yen could continue to weaken this year, which would be good for exporters.
“We retain our view that the yen will weaken towards 130 against the dollar by year-end, from 113 today,” said Marcel Thieliant from Capital Economics.
AFTER THE NEW YEAR
Elsewhere, markets in China were divided.
On the mainland, markets were open after a week off for the Lunar New Year.
The Shanghai Composite was down 2.34 per cent to 2,698.76points in early trade.
In Hong Kong however the Hang Seng was up 2.09 per cent to 18,704.94 points after finishing lower on Thursday and Friday.
In Australia, the benchmark S&P/ASX 200 was up 0.98 per cent to 4,812.20 points, while South Korea’s benchmark Kospi index was up 1.09 per cent to 1,855.45.
BBN/SK/AD