Tokyo stocks close higher as market jitters on Fed rate hike delay countered by yen's retreat

Tokyo stocks posted gains by the close on Wednesday as the yen retreated after an overnight surge triggered by declining prospects the U.S. Federal Reserve would hike its key interest rate in September owing to weak economic data.

The 225-issue Nikkei Stock Average added 149.13 points, or 0.90 percent, from Tuesday to finish the day at 16,745.64.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 12.66 points, or 0.97 percent, to close at 1,311.13.

Early market jitters sparked by the yen's appreciation versus the U.S. dollar overnight on diminishing prospects of a near-term rate hike by the U.S. Federal Reserve due to weak economic data, were eased in later trade following Japan's vice finance minister for international affairs criticizing one-sided currency moves and hinting at intervention.

Local brokers said that Asakawa remarking earlier in the day that the finance ministry would "have no choice but to respond if there are volatile moves," and that developments in the market were being increasingly monitored, helped bolster confidence and was a catalyst for moderate buying.

Market analysts also said that following recent government data showing that Japan's economic expansion in the latest quarter had been negligible at an annualized 0.2 percent, below median economists' forecasts, continued to raise market players' hopes that the central bank here will unleash further easing measures next month and underpinned the overall market.

Notable gainers by the close of play comprised mining, insurance, and iron and steel issues and the day's turnover was 2,072.8 billion yen (20.53 billion U.S. dollars). Endit