Nikkei surges to 7-year high

Japan's benchmark Nikkei 225 Stock Average gained 448.71 points, or 2.73 percent, on Tuesday to end at 16,862. The broader Topix index was up 35.01 points, or 2.63 percent, at 1,368.

The rise came after a long weekend, with Japanese financial markets closed Monday for a national holiday. Already on Friday, Tokyo shares soared 4.83 percent as the yen plunged after Japan's central bank had increased its vast monetary easing program.

Bank of Japan (BoJ) Governor Haruhiko Kuroda said last week he would boost the central bank's stimulus by as much as 20 trillion yen (140 billion euros, $176 billion), bringing it to 80 trillion yen annually, as part of Tokyo's battle against falling prices and weak growth. A sales tax hike in April has dampened Japanese consumer spending and slowed the economy.

Improved competitiveness

Last week, the announcement of fresh BoJ stimulus ignited a rally on global stock exchanges, with the US blue-chip Dow Jones surging 1.13 percent to a record high on Friday.

"The US reaction to the Kuroda bazooka was unexpectedly big," Hirokazu Kabeya, senior strategist at Daiwa Securities, told the news agency AFP, adding that especially Japan's export-driven companies were benefiting from a weakening yen.

On Monday, the Japanese currency fell to its lowest since 2007, trading below 114 yen against the US dollar, before clawing back some ground on Tuesday, rising to 113.33 yen. A weak yen is good for Japanese exporters as it makes them more competitive abroad and inflates their repatriated profits.

As a result, shares in electronics giant Sony jumped 11.05 percent to 2,301 yen in Tokyo on Tuesday and Panasonic soared 5.97 percent to 1,383 yen. Camera maker Olympus also gained more than 5 percent, ending at 4,125 yen.

uhe/ng (AFP, Reuters, dpa)