Tokyo stocks up 0.59% by break

TOKYO (AFP) - Tokyo stocks rose 0.59 per cent Friday morning as bargain-hunting offset early selling triggered by a stong yen.

The Nikkei 225 index gained 83.79 points to 14,247.57 by the break, while the Topix index of all first-section shares climbed 0.85 per cent, or 9.87 points, to 1,169.88.

Tokyo stocks had opened lower as the yen gained ground against the dollar in early trading.

A strong yen is negative for Japanese exporters, making them less competitive overseas and eroding repatriated profits.

"But investors bought on dips, which sent the Nikkei index back into positive territory by noon," said Kenzaburo Suwa, strategist at Okasan Securities.

"A rise in Toyota shares also made investors feel relieved in general," Suwa said.

Toyota was up 0.75 per cent to 5,570 yen by the break after the automaker booked a record US$17.9 billion annual net profit but warned that earnings growth would stall this year.

The dollar was at 101.68 yen in mid-day trading, compared with 101.66 yen in New York Thursday afternoon.

The euro was mixed after European Central Bank chief Mario Draghi said the bank was prepared to further ease monetary conditions next month if the economy needed it.

The euro fetched US$1.3835 and 140.71 yen against US$1.3840 and 140.69 yen in US trade.

As expected, the ECB decided Thursday to hold off on any action for the moment, despite facing a very low rate of inflation and what many say is an overvalued euro.

But in a surprise departure from the bank's previous policy of never pre-committing on interest rate moves, Draghi said monetary policy makers were now sufficiently concerned to take more action.

US stocks finished mixed Thursday as the Dow Jones Industrial Average ended up 0.20 per cent to 16,570.97, while the broad-based S&P 500 slipped 0.14 per cent to 1,875.63.