5:30 PM Tokyo Ė Market indexes in Tokyo shot up and investors looked at international developments. Nikkei soared 2.1% after the U.S. Fed held its low interest rate policy intact and a private survey in China indicated a slight improvement in manufacturing. Modi is set takeover as Prime Minister in India on Monday.
Central bank actions were in focus in Tokyo trading a day after the Bank of Japan held its monetary stimulus program intact.
Stock market indexes shot up and the Topix index gained the most in ten days after the U.S. Fed hinted low rates to continue and cited positive economic development but growth outlook remains low.
Market sentiment was also bolstered after a private survey in China showed a slight improvement in manufacturing activities.
The Nikkei 225 Stock Average increased 2.1% to 14,337.79 and the broader Topix index advanced 1.7% to 1,169.34.
The yen weakened 0.3% to 101.67 against one U.S. dollar.
Japanese companies have been keenly watching the latest Indian election results and Narendra Modi is set to assume Prime Ministerís office on Monday.
Modi has been popular with Japanese companies and has successfully attracted several companies to Gujarat where he was elected as chief ministers four times.
U.S. Fed Estimates Low Rates
U.S. Fed in its policy statement at the conclusion of two-day meeting yesterday estimated moderate economic recovery to continue and inflation is within the target set by the central bank.
The central bank also reiterated its plan to taper and terminate its new bond buying before the end of the year. The policy makers also began discussing new measures and options and impact of higher interest rates on the economy.
The Fed statement indicated that low rates are likely to continue in the near future and additional stimulus measures could improve labor market without stoking inflation. However, the Fed did not announce any new measures.
China Manufacturing Index Improves
The private manufacturing survey in China showed a slight uptick in activities but overall sector growth is still contracting.
The HSBC flash Purchasing Managerís index increased to a five-month high of 49.7 from revised 48.1 in April.
Any reading below 50 indicates a contraction and the private survey includes government and private sector companies.
Stocks in Review
Companies focused on China and the U.S. advanced in trading today.
Alps Electronics Co. gained 3.1% to 1,160 yen and Panasonic Corp added 1.85% to 1,064 yen.
Broker recommendation also weighed on specific stocks.