Tokyo stocks hit 22-month high on fiscal cliff deal

Tokyo stocks sharply rose on the first trading day of the new year, with a key index ending at a 22-month high after the US Congress managed to reach a deal to avert the so-called fiscal cliff of tax increases and spending cuts. The benchmark Nikkei 225 Stock Average on the Tokyo Stock Exchange (TSE) advanced on Friday 292.93 points, or 2.82 percent, from the previous session on December 28, to 10,688.11. The index marked the highest level since March 4, 2011, a week before Japan was hit by a massive earthquake and tsunami. The broader Tokyo Stock Price Index, which includes all First Section issues on the TSE, gained 28.71 points, or 3.34 percent, to 888.51, with all 33 subindexes ending in positive territory. Japan's financial markets were closed from December 29 to Thursday for the New Year holidays. The notable gainers included automakers and other key exporters as export-oriented issues benefited from the stronger dollar, which hit a 29-month high of the upper 87 yen level n Tokyo. A weaker yen against the US dollar and euro benefits exporter shares, as it boosts Japanese exporters' overseas profits when repatriated. Lingering expectations that new Prime Minister Shinzo Abe will intensify pressure on the central bank to further ease monetary policy also boosted investor sentiment.