TOKYO, April 28 (Xinhua) -- Tokyo stocks closed sharply higher Thursday as the Bank of Japan (BOJ) staying pat on its ultra-loose monetary policy fell in line with market expectations, while the yen's drop gave exporters a boost.
The 225-issue Nikkei Stock Average added 461.27 points, or 1.75 percent, from Wednesday to close the day at 26,847.90.
The broader Topix index, meanwhile, gained 38.86 points, or 2.09 percent, to finish at 1,899.62.
Local brokers said Japan's central bank maintaining its ultra-easy monetary policy at the conclusion of its two-day board meeting was met with relief by market participants as there had been minor concerns about a last-minute surprise.
"The outcome was in line with our expectations but there had been some uncertainties that the BOJ might change its policy. Those worries have been removed, which boosted the appetite for stocks," Shigetoshi Kamada, general manager at the research department at Tachibana Securities, was quoted as saying.
But the move by Japan's central bank saw the yen plunge against the U.S. dollar, as the BOJ underscoring its determination to keep its rates at the lowest possible is in stark contrast to the U.S. Federal Reserve's rate hikes and widening gulf in interest rates between Japan and the United States.
"The BOJ didn't just maintain its monetary easing but in a way strengthened it by offering to buy an unlimited amount of bonds," Takuya Kanda, senior researcher at the Gaitame.com Research Institute, was quoted as saying.
"The move made the strong impression on investors that the BOJ's policy is heading in the exact opposite direction from other major central banks," he added.
Following the bank's policy announcement, the yen, which has plunged recently to a number of 20-year lows versus the U.S. dollar, dropped close to the 130 level, prompting the bank to say its recent fixed-rate government bond buying would continue "every business day."
This is in a bid to combat a rise in benchmark 10-year bond yields.
A weaker yen is a boon for exporters as their products become more attractive in price terms in overseas markets and profits can be boosted when repatriated when exchange rates are favorable, strategists here pointed out.
Conversely, as Japan is dealing with increased import costs for energy products and other commodities amid rising inflation, they highlighted that the rise in prices in the longer term could hurt corporate earnings as well as household incomes, as inflation here is not in tune with a rise in wages or an increase in private demand.
By the close of play, iron and steel, transportation equipment and mining issues comprised those that gained the most. Issues that rose outpaced those that fell by 1,503 to 295 on the Prime Market, while 40 ended the day unchanged.
Exporters advancing on the yen's retreat included Nissan Motor accelerating 3.6 percent, while Toyota Motor advanced 3.2 percent. Honda Motor, meanwhile, closed 3.9 percent higher.
Chip-testing equipment maker Advantest was a notable gainer, climbing 4.3 percent, conversely Uniqlo clothing shop operator Fast Retailing weighed on the market dropping 1.3 percent.
On the Prime Market on Thursday, 1,383.63 million shares changed hands, dropping from Wednesday's volume of 1,655.61 million shares.
The turnover came to 3,411.46 billion yen (about 26.12 billion U.S. dollars). ■