Tokyo stocks advance as commodities gain, strong yen weighs

19:23, August 03, 2010      

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Tokyo stocks rose Tuesday as concerns about the pace of the global economic recovery were eased by robust earnings reports from European banks and U.S. manufacturing data that came in above the markets' expectation helped lift optimism.

The 225-issue Nikkei Stock Average advanced 123.70 points, or 1. 29 percent, from Monday to 9,694.01, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 8. 49 points, or 1.00 percent, to 859.18.

Analysts said some investors were returning to riskier assets like stocks as solid earnings from HSBC Holdings and BNP Paribas in Europe, as well as better-than-expected U.S. manufacturing data, lifted the market mood, although some said uncertainty remained.

They warned that the rebound could be fragile, based mostly on short-covering and with investors wary ahead of U.S. indicators later this week, including non-farm payrolls data on Friday.

"Although the situation looks good for now, a question mark remains in the market about the outlook for the global economy," said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

"Investors are trying to determine whether signs of a slowdown in the recovery are just a lull or point to a double-dip. That's why the market is struggling to keep building on gains."

Shares of trading houses gained after copper and oil prices surged on Monday to three-month highs.

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