Tokyo stocks rise 2% in early trade

TOKYO — Tokyo stocks rose more than two per cent in early trade Thursday, supported by a cheaper yen following the US Federal Reserve's rate cut.

The benchmark Nikkei 225 index was up 2.11 per cent, or 766.65 points, at 37,146.82, while the broader Topix index rose 2.09 per cent, or 53.59 points, at 2,618.96 yen.

"The Japanese market is expected to be led by buy orders after the yen eased against the dollar following the" Fed meeting, Mizuho Securities said.

But traders may later refrain from active buying ahead of the Bank of Japan's policy meeting on Friday, it added.

"The Japanese market is expected to start with gains on the backdrop of a cheaper yen" against the dollar, senior market analyst Toshiyuki Kanayama of Monex said.

The dollar fetched 143.53 yen in Asian trade, against 142.29 yen in New York late Wednesday.

Overnight, Wall Street stocks finished modestly lower after the Fed announced an interest rate cut of half a percentage point, ending days of speculation about the size of the move.

The Dow Jones Industrial Average finished down 0.3 per cent at 41,503.10, the broad-based S&P 500 also shed 0.3 per cent to 5,618.26 and the tech-rich Nasdaq slipped 0.3 per cent to 17,573.30

The Fed went with the bigger rate cut, surprising some analysts who had tapped the quarter of a percentage point as the more likely decision.

However, some market watchers had said stocks were primed for a pullback no matter the outcome after pushing higher in recent weeks.