Tokyo shares rally on French presidential vote

AFP , Monday 24 Apr 2017

French presidential election candidate for the En Marche ! movement Emmanuel Macron (C) looks on at La Rotonde restaurant in Paris, on April 23, 2017, after the first round of the Presidential election (Photo: AFP)

Tokyo stocks rose Monday as investors cheered news that market-friendly Emmanuel Macron came out ahead of far-right candidate Marine Le Pen in the first round of France's presidential election.

The French vote was being closely watched as a gauge of populist sentiment following the election of Donald Trump as US president and Britain's vote to leave the EU.

Macron, a former banker and economy minister, won 23.7 percent of Sunday's first-round vote, slightly ahead of National Front leader Le Pen with 21.5 percent, according to near-final results from the interior ministry.

The two go through to a second round on May 7. Nine other candidates were eliminated.

"Polls have repeatedly suggested that Macron is likely to comfortably beat Le Pen in the second round," Diego Iscaro at research house IHS Markit Economics said in a commentary.

The benchmark Nikkei 225 rose 1.37 percent, or 255.13 points, to finish the day at 18,875.88. The broader Topix index of all first-section issues ended up 0.98 percent, or 14.61 points, to 1,503.19.

The euro rose sharply against the yen, a plus for Japanese shares because a cheaper currency inflates the repatriated profits of firms doing business abroad.

In early Asian trading, the European single currency was at $1.0865 against $1.0726 on Friday. It had earlier gone as high as $1.0937, about two percent above its New York levels.

The euro also rose to 119.79 yen from 117.07 yen.

The second round will come down to a battle between the pro-European, pro-globalisation vision of Macron and Le Pen's hostility to the EU and NATO.

In Tokyo trading, Sony surged nearly four percent to 3,730 yen after nearly tripling its annual net profit forecast on Friday.

Other exporters won support from the weaker yen. Panasonic traded 3.35 percent higher at 1,308 yen and Hitachi rose 0.52 percent to 590.5 yen.

Troubled auto parts supplier Takata soared 9.93 percent to 498 yen.

It was not clear what was driving the rise, but markets are keeping a close eye on a possible deal to sell the Tokyo-based company to a foreign buyer.

Toshiba, facing massive losses racked up over many years from its US nuclear business, rose 0.38 percent to 208.1 yen after announcing it plans to split its major operations into wholly owned units to speed up decision-making and improve governance.

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