Tokyo shares firm after Dow renews record high

TOKYO (AFP) - Japanese shares traded higher in early trade Monday on sustained investor optimism after Wall Street shares reached a new closing high.

The headline Nikkei index at the Tokyo Stock Exchange was up 0.21 per cent or 29.45 points at 14,229.04 shortly after the opening bell.

The market's upward momentum came after the Dow Jones Industrial Average closed last week at a fresh record high, with investors shrugging off mixed earnings reports and uncertainty over the Russia-Ukraine crisis.

The Dow Jones Industrial Average advanced 32.37 points (0.20 per cent) to 16,583.34, 2.5 points above the previous high on April 30.

The broad-based S&P 500 added 2.85 (0.15 per cent) at 1,878.48, while the tech-rich Nasdaq Composite Index outperformed, gaining 20.37 (0.50 per cent) at 4,071.88.

Tokyo players are waiting for annual earnings reports from major Japanese companies later in the day, including automaker Nissan and engineering giant Hitachi.

Shortly before the market opened, the Japanese government said the nation's account balance for the year to March plunged 81.3 per cent from the previous year, mainly due to surging fuel cost.

The annual account balance fell to 789.9 billion yen (S$9.68 billion), down sharply from 4.2 trillion yen logged in the previous year.

"Exports increased including those bound for the United States and China. But trade deficit expanded due to the increase of imports such as crude oil and liquefied natural gas," the finance ministry said in a statement.

Japan once boasted a large trade surplus on exports of cars and other industrial products.

But the nation has recently been saddled with heavy deficits stoked by its dependence on importing fossil fuels to generate electricity, with nuclear reactors shut down after the 2011 tsunami-sparked atomic disaster.

The yen's sharp depreciation since late 2012 has also pushed up import costs.

The dollar stood at 102.03 yen, firming from 101.83 yen in New York Friday.

The euro was at US$1.3759 and 140.32 yen, nearly flat from US$1.3758 and 140.10 yen in New York.