Tokyo stocks spiked Tuesday morning, with the Nikkei index up over 3 percent and gaining more than 500 points, as stabilizing oil prices and receding crude oversupply concerns boosted sentiment, while a weakening yen lifted export-oriented shares.
The 225-issue Nikkei Stock Average climbed 565.90 points, or 3.48 percent, from Monday to 16,841.85. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 40.27 points, or 3.05 percent, to 1,360.42.
Every industry category on the main section gained ground led by banking, insurance, and electric appliance issues.
Tokyo stocks soared from the outset after the Dow Jones Industrial Average topped the 18,000 threshold for the first time in roughly nine months. The rebound in oil prices eased steep losses that occurred after negotiations among major oil producing nations to freeze output at current levels failed over the weekend.
Reports on Monday that Kuwait has been forced to reduce its oil output due to a workers' strike at an oil industry facility also boosted sentiment, increasing hopes that the glut of crude supply may ebb, brokers said.
"The recovery in oil prices and receding oversupply concerns are boosting sentiment," said Maki Sawada of Nomura Securities Co.
Sawada said oil prices continue to be a focal point for the global market. "There has been a strong correlation between oil prices and stocks this year. When crude prices are up, the market becomes risk-on."
Brokers said that the yen's depreciation against the dollar also supported the Tokyo stock market, lifting export-oriented shares and easing concerns about the outlook for corporate profits.
The U.S. dollar rose to the lower 109 yen zone during the morning session after falling to the upper 107 yen range Monday afternoon.
On the First Section, advancing issues trounced declining ones 1,765 to 122, while 64 ended the morning unchanged.
Resource-related shares soared on stabilizing oil prices, with Japan Drilling climbing 115 yen, or 5.0 percent, to 2,417 yen, and Showa Shell gaining 34 yen, or 3.3 percent, to 1,075 yen.
Yamato increased 40 yen, or 9.0 percent, to 483 yen after the engineering firm focused on air-conditioning upgraded Monday its earnings guidance for the year that ended last month.
==Kyodo
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