Tokyo: Tokyo stocks rose 1.22 percent to a near seven-year high on Thursday morning as the dollar surged against the yen and following a rally on Wall Street.
The Nikkei 225 index at the Tokyo Stock Exchange gained 197.29 points to 16,364.74 by the break, close to its highest levels since November 2007.
The Topix index of all first-section issues was up 1.14 percent, or 15.12 points, at 1,341.30.
Exporters were the main beneficiaries after the dollar broke through the 109-yen mark in New York after data showed US new home sales hit a six-year high in August.
The greenback was changing hands at 109.11 yen, up from 109.04 yen in US trade and well up from the 108.52 yen in Tokyo earlier Wednesday.
However, analysts warned about the impact of a too strong dollar rally.
"The dollar`s continuing strength flies in the face of diverging opinions about the benefits of its rise, as a too-strong greenback is not good for US exporters and also not good for Japan which currently is so reliant on imported fossil fuels," said Daisuke Uno, strategist at Sumitomo Mitsui Banking.
Japan`s fossil fuel imports soared after the 2011 Fukushima nuclear crisis forced the closure of nuclear reactors that once supplied more than a quarter of the country`s power.
In Tokyo share trading exporters were higher, with Toyota up 1.80 percent at 6,539.0 yen and Sony rising 1.60 percent to 1,904.0 yen.
Panasonic was up 1.18 percent at 1,318.5 yen after the leading Nikkei business daily said the firm plans to take a near 50 percent stake in major Spanish auto parts manufacturer Ficosa International.
