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Tokyo stocks close 0.84% higher

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February 20 2013, 6:42PM

Tokyo stocks have closed 0.84 per cent higher as investor sentiment improves after key indexes on Wall Street hit their highest levels in more than five years.

The Nikkei 225 index added 95.94 points to 11,468.28 while the Topix index of all first-section shares rose 1.05 per cent, or 10.09 points, to 973.70.

Wednesday's session recouped the previous day's losses on the Nikkei, with the benchmark index rising above the 11,500 mark in intraday trade for the first time since September 2008.

"This may not necessarily mean a big range break but it confirmed that the rising trend will continue," Hiroaki Osakabe, fund manager at Chibagin Asset Management, told Dow Jones Newswires.

Tokyo shares have been on the rise as the new Japanese government's moves to kickstart the economy have been welcomed by investors, helped but the yen's steep decline in recent months.

Expectations Tokyo will soon appoint a new Bank of Japan governor who favours aggressive monetary easing was also likely to drive stocks upward, dealers said. Easing tends to push down the value of the yen, helping exporters.

Wednesday's gains came after a strong performance on Wall Street, where the Dow hit its highest level since October 2007, and a surge in a closely watched German investor confidence index, offering renewed optimism over the eurozone.

Tokyo shrugged off poor trade data Wednesday, which showed Japan suffered its worst-ever monthly trade deficit in January, mainly due to higher fuel import costs.

In stock trading, financial-services and leasing giant Orix rose 2.42 per cent to 10,580 yen after saying on Tuesday it had agreed to buy Dutch asset manager Robeco for about $US2.58 billion ($A2.50 billion), its largest-ever acquisition.

Major exporters also gained, with Canon up 1.51 per cent to 3,345 yen, Toyota rising 1.68 per cent to 4,820 yen, Panasonic climbing 3.16 per cent to 685 yen and NEC shares adding 4.80 per cent to 240 yen.

In forex trade, the dollar weakened to 93.27 yen in Tokyo against 93.54 yen in New York on Tuesday, while the euro fetched 125.15 yen from 125.24 yen.