Tokyo stocks rebounded Monday morning following steep falls late last week as fears of an escalation in the Middle East conflict eased.
The 225-issue Nikkei Stock Average rose 266.62 points, or 0.72 percent, from Friday to 37,334.97. The broader Topix index was up 34.52 points, or 1.31 percent, at 2,660.84.
The U.S. dollar was firm in the upper 154 yen range in Tokyo on prospects that the interest rate differential between the United States and Japan will remain wide as the Federal Reserve is expected to keep interest rates elevated amid persistent inflation.
At noon, the dollar fetched 154.64-67 yen compared with 154.57-67 yen in New York and 154.47-49 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.0663-0667 and 164.89-99 yen against $1.0652-0662 and 164.75-85 yen in New York and $1.0655-0656 and 164.59-63 yen in Tokyo late Friday afternoon.
Stocks rose as market participants scooped up battered shares after the Nikkei dropped over 1,000 points Friday, with concern over an escalating conflict in the Middle East eased by reports Iran has no immediate plans to respond to an attack by Israel.
The fall of the benchmark U.S. oil futures contract following a spike last week also drove buying of air transportation issues on hopes for lower fuel costs.
But stocks erased some earlier gains, with the Nikkei briefly turning negative, as semiconductor-related issues dropped after sell-offs of their U.S. counterparts.
Despite the falls of heavyweight chip shares, the market was supported by bargain-hunting, said Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co.
