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Tokyo stocks open higher as business confidence gains

WT24 Desk

TOKYO- Tokyo stocks opened slightly higher Wednesday on a pick-up in Japanese business confidence, though investors cautiously awaited the end of a key US central bank meeting.

Gambling-related shares gained as Japan’s parliament was expected to give final approval to controversial legislation allowing the introduction of casinos.

Shortly before the market opened, the Bank of Japan released a quarterly survey showing that business confidence among the country’s largest manufacturers posted its first rebound in over a year as the yen tumbled following Donald Trump’s win in the US presidential election.

The Tankan report is a key gauge of the health of Japanese business and is closely watched by investors.  But the market impact was limited as investors awaited the results of the US Federal Reserve meeting later in the day.

“Investors are now reluctant to take big positions as they want to confirm results from the Fed meeting,” Shinichi Yamamoto, a broker at Okasan Securities in Tokyo, told AFP.

The benchmark Nikkei 225 index, which closed at its best level in a year the previous day, gained 0.07 percent, or 13.09 points, to 19,263.61 in the first few minutes of trading.  The broader Topix index of all first-section issues was up 0.95 points to 1,541.20.

The Fed is widely expected to announce a hike in its key interest rate given strong job growth and other data in the world’s largest economy, with some seeing more to come in 2017.

“We go into the New Year with the market and the Fed on the same page in terms of where rates are going,” said Chris Weston, chief markets strategist in Melbourne at IG Ltd.

“The recent upbeat sentiment — specifically in global equities — has not just been about what “Trumponomics” could bring to inflation and growth, but we are genuinely seeing an improvement in the economic data flow in many developed markets,” Weston told Bloomberg News.

On Wednesday, the dollar changed hands at 115.21 yen against 115.16 yen in New York on Tuesday afternoon.  A weaker yen is considered a positive for exporters as it improves their profitability.  Separately, Japanese lawmakers hope to get the casino law passed on Wednesday, the last day of the current parliamentary session.

Pachinko-machine maker Konami firmed 0.96 percent to 4,200 yen in early trading, while Japan Cash Machine, a bill counting device manufacturer, rose 1.18 percent to 1,531 yen  Amusement machine maker Sega Sammy, meanwhile, was unchanged at 1,803 yen.

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