国际英语新闻：Nikkei rises 0.9% on weak yen, U.S. tax cut plans

TOKYO, Dec. 8 (Xinhua) -- Tokyo stocks rebounded Wednesday, with the key Nikkei stock index gaining 0.90 percent as a possible extension to U.S. tax cuts sent the U.S. dollar higher against the yen, bolstering Japan's exporter-related issues.

Brokers said that news that U.S. President Barack Obama had agreed in principle to a framework to extend the previous administration's tax cuts for two years, as part of a deal that will include a 2 percent payroll tax deduction and an extension of jobless benefits, saw U.S. Treasury yields surge pushing the U.S. dollar to a near three month high versus its Japanese counterpart.

"The dollar/yen rate now stands at well over 83 yen, and that's pretty much the biggest positive factor supporting stocks today," said Kenichi Hirano, operating officer at Tachibana Securities.

Analysts indicated that recent signs the health of the global economy is showing signs of improvement, coupled with the yen's depreciation, will encourage investors to return to Japanese export-related issues.

"The global economy is on track for mild recovery in terms of fundamentals,"said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc."Investors are likely to buy stocks, led by those of export-related industries, on the reversal of the yen's appreciation."

"The market lacks major buying incentives other than the softer yen, but stocks are gaining. So funds are probably shifting from bonds to stocks as well," said one Tokyo based market specialist.

The 225-issue Nikkei Stock Average closed up 91.23 points from Tuesday at 10,232.33, its highest close since June 21.

The Nikkei today also hit a 7-month intraday high of 10,258.90, demonstrating that a bullish sentiment is underpinning the market and encouraging retail investors in particular to chase the market higher, according to market analysts.