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Japan stocks surge on weaker yen, US election

Japan stocks surge on weaker yen, US election

Japanese stocks surged Wednesday, propelled by a weaker yen, global equity gains and hopes that Barack Obama's election to U.S. president and Democratic gains in Congress would lead to policies that would boost the American economy.
The benchmark Nikkei 225 stock average climbed 406.64 points, or 4.46 percent, to 9,521.24. The broader Topix added 6.17 percent to 966.91.
A strong overnight rally on Wall Street lifted Japanese stocks in the morning, but gains accelerated in the afternoon as Obama sealed his historic victory in the U.S. presidential race.
Investors were upbeat after Obama's win, as well as the Democrats' bigger majorities in Congress, said Toshikazu Horiuchi, equity strategist at Cosmo Securities in Tokyo.
"There are expectations now for prompt economic stimulus measures," he said.
But there were also some concerns that a Democratic president and Congress might take a harder line on trade.
A weaker yen also helped lift sentiment, benefiting major exporters including automakers and consumer electronics firms. Toyota Motor Corp. surged 10.4 percent to 4,250 yen, and Sony Corp. advanced 9.1 percent to 2,580 yen.
A strong yen hurts exporters by making Japanese products more expensive in overseas markets and reducing the the value of profits when repatriated to Japan.
Sanyo Electric Co. surged 18 percent after being untraded Tuesday due to a rush of buy orders triggered by weekend reports that the company may be bought by rival Panasonic Corp.
A Sanyo-Panasonic entity would create Japan's biggest electronics maker, surpassing Hitachi Ltd., and would also be among the biggest in the world. Officials from both companies denied Tuesday that any deal has been reached.
Banks rose sharply as money market rates fell, with Mitsubishi UFJ Financial Group Inc. up 11.3 percent at 698 yen and Mizuho Financial Group Inc. adding 16.1 percent to 288,400 yen.
In currencies, the dollar was trading at 99.43 yen Wednesday afternoon, up from the 98-yen zone the previous day in Asia.
In New York Tuesday, the Dow climbed 3.3 percent to 9,625.28 in its biggest Election Day rally ever.