By Pamela Sampson, AP business writer
BANGKOK -- Japan's benchmark stock index jumped Tuesday as a softening yen helped boost the country's powerhouse export sector. The Nikkei 225 index in Tokyo rallied 1.4% to close at 10,080.12, with export shares leading the way.
The yen traded at a 20-month high of 84.95 yen in New York after incoming Prime Minister Shinzo Abe turned up the pressure on the Bank of Japan to adopt a 2% inflation target. During a televised program Sunday, Abe said he will consider revising the Bank of Japan Act if the central bank refuses to act at next month's policy meeting, Kyodo News Agency said.
That's designed to fight deflation, or continually dropping prices, which deadens economic activity. The Japanese economy has been stuck in deflation for two decades. On Monday in Asia, the dollar stood at 84.77 yen.Mazda Motor Corp. gained 2%, while Nikon Corp. advanced 2.3%. Nomura Holdings jumped 6.3%. Stocks in mainland China posted strong gains. The Shanghai Composite Index jumped 2.5% to 2,213.61. The smaller Shenzhen Composite Index surged 2.4% to 855.79. Shares in real estate, financial services and travel-related companies led the gains. Poly Real Estate, China's second-largest listed developer, gained 4.7% while industry leader China Vanke soared 6%. Markets in Hong Kong, South Korea, Singapore, the Philippines, Australia and New Zealand were among those closed for Christmas. On Wall Street on Monday, the last day of trading before Christmas, stocks fell on concern that time is running out for lawmakers to reach a budget deal to avoid the U.S. going over the "fiscal cliff." The Dow Jones Industrial Average lost 0.4% to close at 13,139.08. The Standard & Poor's 500 index fell 0.2% to 1,426.66. The Nasdaq composite index fell 0.2% to 3,012.60. For weeks, discussions between the White House and Congress over a budget deal have been the main driver in markets. If a deal isn't reached by the start of 2013, automatic spending cuts and tax increases worth hundreds of billions of dollars will be imposed -- which many economists think could push the U.S. economy back into recession. Most markets across Europe were open for only half a day on Monday and won't reopen until Thursday.