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Last Updated: Tuesday, 4 November, 2003, 06:22 GMT
Fresh optimism for Japan shares
Businessmen walk past a board showing stock prices in Tokyo
A rising Nikkei could help the government in upcoming polls
Solid gains for Japanese stocks on Tuesday could prove good news for Prime Minister Junichiro Koizumi as he faces a general election this weekend.

Pollsters are predicting that Mr Koizumi's Liberal Democratic Party - in power for all but a handful of years in the past half-century - could face a tough challenge from the Democratic Party of Japan in Sunday's poll.

But much rides on perceptions of whether Japan's flagging economy is finally turning the corner.

And after fresh data indicated that the rapid third quarter growth of 7.2% in the US could be an understatement, record manufacturing figures in Japan sent key stocks soaring.

Manufacturing activity accelerated faster in October than for two years, a survey said, and shares such as motor giant Toyota, with earnings due out later this week, leapt.

By the close, the benchmark Nikkei 225 index was up 2.5%, following strong gains on Wall Street overnight.

At the same time, the US dollar - which had climbed sharply while a public holiday meant Japanese traders took a long - fell back.

Japanese companies took advantage of the dollar's rise to above 111 yen to swap foreign earnings for yen, bringing revenue back home.

But the greenback still closed well above Friday's level in Tokyo at 110.12 yen to the US dollar.


MARKET DATA - 11:37 UK

FTSE 100
5428.78up
22.84 0.42%
Dax
5732.06up
18.55 0.32%
Cac 40
3783.91up
14.37 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
Data delayed by at least 15 minutes

SEE ALSO:
Koizumi promises economic shakeup
14 Oct 03  |  Business
Exporters weaken on yen woes
08 Oct 03  |  Business
Japan strives for weaker yen
02 Oct 03  |  Business
Profile: Japan's economic champions
22 Sep 03  |  Business
Japan reshuffle targets economy
22 Sep 03  |  Business


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