Tokyo: Tokyo shares opened higher as investors’ risk-on sentiment was buoyed after gains on Wall Street during a period known as the Santa Claus rally.
The benchmark Nikkei 225 index added 0.92 percent, or 264.37 points, to 28,940.83 in early trade, while the broader Topix index rose 0.85 percent, or 16.85 points, to 1,994.75.
“Today’s shares are expected to stay strong after a rebound. US stocks are trading higher in the midst of a Santa Claus rally, and risk-on trends are likely to spread to Japanese stocks,” Okasan Online Securities said.
US stocks usually drift higher towards the year-end, a period of low trading volumes and light news.
On Wall Street, the S&P 500 ended at a second consecutive record on Monday. The Dow Jones Industrial Average climbed 1.0 percent while the tech-rich Nasdaq Composite Index jumped 1.4 percent.
The dollar fetched 114.77 yen, down from 114.88 yen in New York Monday.
Before the opening bell, the Japanese government said factory output in November rose 7.2 percent from the previous month and the jobless rate was 2.8 percent, inching up 0.1 percent from the previous month.
SoftBank Group climbed 0.95 percent to 5,270 yen while Uniqlo operator Fast Retailing added 0.21 percent to 66,500 yen.
Sony jumped 1.98 percent to 14,650 yen while Tokyo Electron gained 1.49 percent to 66,580 yen.
Automakers were higher with Toyota growing 0.83 percent to 2,125.5 yen, Honda up 1.00 percent at 3,223 yen and Nissan rising 0.47 percent to 555.3 yen.
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Automakers were lower with Toyota dropping 1.75 percent to 2,068 yen, Honda losing 0.64 percent to 3,237 yen and Nissan slipping 0.28 percent to 568.5 yen.
“Sentiment is strong with gains in U.S. equities last night. The Japanese market will keep the momentum if the U.S. market remains strong,” said Takatoshi Itoshima, a strategist at Pictet Asset Management.