Tokyo - Stocks in Tokyo rocketed upward Monday after the US government seized control of the two largest US mortgage lenders and guarantors, Fannie Mae and Freddie Mac. The benchmark Nikkei 225 Stock Average jumped 412.23 points, or 3.38 per cent, to close at 12,624.46 on investor confidence that the move would calm turmoil in global financial markets.
The broader Topix index of all first-section issues also rose 45.57 points, or 3.89 per cent, to 1,216.41.
The increases were seen a day after the announcement that the Federal Housing Financing Agency would take over Fannie Mae and Freddie Mac as the US government sought to deflect the rising threat of mortgage defaults to the two companies that manage nearly half the 12-trillion-dollar US mortgage market
The two firms are to be placed under a so-called conservatorship, their chief executives replaced and their dividends eliminated while the US Treasury is to purchase up to 100 billion dollars of senior-preferred stock in each company.
Japanese Finance Minister Bunmei Ibuki welcomed the rescue plan, saying it should help to stabilize the US financial markets and thereby help the world economy.
Financial stocks saw the biggest gains, but three sectors - electricity and gas, paper and aviation - suffered losses.
On currency markets at midday (0300 GMT), the dollar was quoted at 108.60-65 yen, a substantial increase from Friday's 5 pm quote of 106.48-50 yen.
The euro was quoted at 1.4417-22 dollars, up from Friday's 5 pm quote of 1.4280-82 dollars, and at 156.54-59 yen, up from 152.06-10 yen.
