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TOKYO, Dec 27 AFP

December 27 2012, 11:26AM

Tokyo stocks have opened 0.63 per cent higher, helped by a steadily weakening yen.

The Nikkei 225 index at the Tokyo Stock Exchange, which climbed 1.49 per cent to hit a nine-month high the previous day, added another 64.90 points to 10,295.26 at the outset on Thursday.

"The weaker yen should easily offset US stocks' third straight fall, allowing the Nikkei to break its 2012 high of 10,255.15 set in February," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

The US dollar rose to its highest level in more than two years against the yen overnight as Shinzo Abe was sworn in as prime minister amid expectations the Bank of Japan would initiate more monetary easing steps under his leadership.

Abe - whose Liberal Democratic Party won a landslide election victory this month - has heaped pressure on the central bank to take bold easing steps.

The US dollar was at 85.66 yen in early Asian trade, almost unchanged from New York on Wednesday afternoon.

The euro fetched 113.25 yen and $1.3226 compared with 113.19 yen and $1.3223.

Toyota shares opened up 1.04 per cent at 3,870 yen on Thursday after the automaker said it had agreed to pay about $US1.1 billion ($A1.07 billion) to settle a class action lawsuit launched by US vehicle owners affected by a series of mass recalls.

US stocks fell on Wednesday amid uncertainty about whether a deal to avert the "fiscal cliff" could be reached by an end-of-year deadline.

The Dow Jones Industrial Average was down 0.19 per cent to finish the session at 13,114.59.