Tokyo stocks closed higher on Wednesday as traders were cautiously optimistic about economic recovery and cheered reported advances in research on coronavirus treatments.

The benchmark Nikkei 225 index rose 1.59 percent, or 358.49 points, to close at 22,945.50, while the broader Topix index ended up 1.56 percent, or 24.36 points, at 1,589.51.

Rallies in Tokyo tracked gains in US shares prompted by expectations for more stimulus spending from Washington and progress in the development of a virus vaccine.

US biotech firm Moderna announced it would begin the final stage of human trials for its COVID-19 vaccine candidate.

“Following news of a vaccine development, expectations for a normalisation in economic activities are supporting share prices,” said Yoshihiro Ito, chief strategist at Okasan Online Securities.

The dollar fetched 107.27 yen in Asian trade, against 107.28 yen in New York on Tuesday.

The Bank of Japan stood pat on its monetary policy in a two-day meeting that ended on

Wednesday, having no significant impact on the stocks or foreign exchange markets, analysts said.

In its quarterly economic report, the central bank said Japan’s economy will contract 4.7 percent in the year to March 2021, projecting a recovery the following year but warning that deep uncertainty remains.

The fresh outlook, with policymakers giving a range from a contraction of 5.7 to 4.5 percent, is a downgrade from an April projection of a 5.0-3.0 percent contraction.

In Tokyo, automakers were among the winners, with Honda rallying 3.15 percent to 2,845.5 yen,

Nissan jumping 7.25 percent to 418.6 yen and Toyota closing up 1.34 percent at 6,835 yen.

China-linked shares were also higher, with construction machinery maker Komatsu ending up 2.68 percent at 2,276.5 yen, and industrial robot maker Fanuc jumping 4.17 percent to 21,070 yen.

AFP