Japan's Nikkei average rose to a one-week high on Thursday, supported by gains for exporters as hopes that a new government could lead to easier monetary policy weakened the yen, but Sony Corp tumbled on a fundraising plan.
By the midday break, the Nikkei advanced 1 percent to 8,748.29 Points, breaking above its five-day moving average at 8,701.62, as investors shrugged off concerns about the prospect of protracted negotiations to resolve fiscal gridlock in the United States. Sony slumped 10.6 percent after the consumer electronics maker said it will raise $1.9 billion through a sale of convertible bonds, a third of which will be used for investment in scandal-hit Olympus Corp. It was the most traded stock on the main board by turnover.
But other exporters bounced as the yen traded at 80.19 to the dollar, not far from a one-week low of 80.31 yen touched on Wednesday after Prime Minister Yoshihiko Noda unveiled plans to dissolve parliament's lower house on Friday for a snap election on Dec. 16.
The main opposition Liberal Democratic Party (LDP) is expected to win the poll. Among the exporters, Toyota Motor Corp, Honda Motor Co, Canon Inc and industrial robot maker Fanuc Corp climbed between 1.8 and 3.1 percent.
Everyone is expecting Shinzo Abe from the LDP to be the next prime minister. He will pressure the BOJ to conduct bold monetary easing by setting a 2 to 3 percent inflation target, said Shun Maruyama, chief Japan equity strategist at BNP Paribas. In the near-term, we can be bullish on the Nikkei and bearish on the Japanese yen. Comments by U.S. President Barack Obama that he won't sign off on more tax cuts for the wealthy, and unyielding remarks from Republican leaders earlier this week, signal a long period of negotiation and brinkmanship that could leave a cloud of uncertainty over the economy.
Worries over the so called fiscal cliff in the United States have been weighing on global equities, including Japanese stocks, with the Nikkei falling for seven sessions in a row from Nov. 5 to 13.
The benchmark had lost 4.3 percent