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REFILE-Nikkei surges 2.5 pct on U.S. tax cut hope; Abe-Trump talks awaited
February 10, 2017 / 2:25 AM / in 8 months

REFILE-Nikkei surges 2.5 pct on U.S. tax cut hope; Abe-Trump talks awaited

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* Nikkei has risen 2.2 pct for the week

* Financials, exporters strong

By Ayai Tomisawa

TOKYO, Feb 10 (Reuters) - Japan’s Nikkei share average soared 2.5 percent on Friday morning, following Wall Street’s lead after U.S. President Donald Trump said he would make a major tax announcement in a few weeks.

The Nikkei swept to 19,378.15 in midmorning trade, its highest level since Jan. 30. For the week, the benchmark index has so far gained 2.2 percent.

Wall Street stocks surged to record highs on Thursday and the U.S. dollar and bond yields rose after Trump said he would release a “phenomenal” tax plan in the next few weeks.

Investors have been waiting for details on Trump’s election campaign pledge to stimulate economic growth with large-scale fiscal stimulus through infrastructure spending and tax cuts.

Masaru Hamasaki, head of market & investment information department at Amundi Japan, said investors were relieved to focus on the positive side of Trump’s policies, like tax cuts, after earlier being rattled by his controversial stance on immigration and conflict with U.S. courts on the issue.

Hamasaki also said that investors would also be focused on the outcome of talks between Trump and Japanese Prime Minister Shinzo Abe later in the global day, with discussions likely to touch on trade, security and macroeconomic issues including currencies.

“Markets are sensitive to anything related to currency and economy. That said, some of us are laid back as we’ve been hearing that the main purpose of the meeting could be bonding and building a trusted relationship with him,” Hamasaki said.

On Saturday, Trump and Abe will play a round of golf, presumably at the Trump International Golf Club near his Mar-a-Lago resort in Palm Beach.

The dollar extended its overnight rally and edged up to a nine-day high of 113.79 yen. Exporters staged a rally, with Toyota Motor Corp and Honda Motor Co both rising 2.9 percent, while Panasonic Corp soaring 3.2 percent.

Higher yields helped financial shares. Mitsubishi UFJ Financial Group surged 2.9 percent, while insurers Dai-ichi Life gained 2.9 percent and Sompo Holdings added 2.1 percent.

The broader Topix gained 2.0 percent to 1,543.73 and the JPX-Nikkei Index 400 advanced 2.1 percent to 13,852.10. (Editing by Simon Cameron-Moore)

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