Tokyo stocks up 1.79% by break

TOKYO (AFP) - Tokyo stocks rose strongly on Monday morning with the Nikkei up 1.79 per cent as the yen sank in currency markets and after Wall Street logged record closings last week.

The benchmark Nikkei 225 index added 262.42 points to 14,894.80 by the break, while the Topix index of all first-section shares climbed 1.32 per cent, or 15.82 points, to 1,217.23.

Upbeat China data boosted sentiment as the weekend figures showed manufacturing activity strengthening to a five-month high in May, an optimistic sign amid slumping growth in the world's second-largest economy.

The data came after the Dow and S&P 500 on Friday closed at new highs following fresh merger and acquisition activity.

"The China data are encouraging futures trading, which is leading the market higher," Yoshihiro Okumura, general manager at Chibagin Asset Management, told Dow Jones Newswires.

Speculation that the Japanese public pension fund would soon announce plans to boost the portion of stocks in its huge portfolio also helped drive gains, dealers said.

Exporter shares won support from a weaker yen, which inflates their profitability, with the dollar fetching 102.03 yen compared with 101.75 yen in New York Friday afternoon.

Sony shares rose 1.84 per cent to 1,657 yen, Toyota gained 1.09 per cent to 5,824 yen while Nikon added 2.04 per cent to 1,645 yen.

Dai-ichi Life Insurance bucked the upward trend with its shares down 3.97 per cent to 1,448 yen after the company said it was considering buying a US firm, which reports identified as the mid-sized Protective Life.

Japanese media pegged the value of the takeover at nearly US$5.0 billion (S$6.2 billion).

In New York, the Dow Jones Industrial Average advanced 0.11 per cent to 16,717.17, setting a fresh record, while the S&P 500 advanced 0.18 per cent to 1,923.57, notching a record for the second straight day.