Tokyo stocks open sharply higher on US debt deal

29 May 2023 09:01am
Image for illustrative purposes only. - FILE PIX
Image for illustrative purposes only. - FILE PIX

TOKYO, Japan - Tokyo stocks opened higher Monday, with investors cheered by signs of a breakthrough in US debt ceiling negotiations to avert a cataclysmic default.

The benchmark Nikkei 225 index was up 1.94 per cent, or 599.22 points, at 31,515.53 in early trade, while the broader Topix index added 1.31 per cent, or 28.19 points, to 2,174.03.

The dollar stood at 140.91 yen, against 140.59 yen in New York on Friday.

President Joe Biden and Republican leader Kevin McCarthy said Sunday that a final bipartisan deal to raise the US debt ceiling now heads to Congress, which will need to pass the agreement before the government starts running out of money.

The compromise after weeks of intense talks offers a path back from the precipice, even as the clock is still ticking down to the June 5 "X-date" when the Treasury estimates there might not be enough cash to pay bills and debts.

"Improving hopes of a relatively orderly lift to the debt ceiling ahead of the X-date should boost risk sentiment into the start of the week," Taylor Nugent, an economist at National Australia Bank, said.

The effect was felt in Japan, where "receding concerns over uncertainties (linked to the debt ceiling wrangling) are likely to provide tailwinds for the market," Tokai Tokyo Securities said.

Among major shares in Tokyo, SoftBank Group surged 2.77 per cent to 5,264 yen, Sony Group added 0.59 percent to 13,445 yen and Toyota rose 0.28 per cent to 1,942.5 yen.

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