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Tokyo stocks closed higher on Tuesday following reports that US lawmakers had agreed in principle to avoid a government shutdown, with the market also helped by a cheaper yen.
The benchmark Nikkei 225 index soared 2.61% to end at 20 864.21, while the broader Topix index rose 2.16% to 1 572.60.
“Tokyo stocks continued to rise after the reports on the US agreement to avoid a goverment shutdown,” Okasan Online Securities said in a note.
US Senator Richard Shelby, a key Republican negotiator, told reporters late on Monday that lawmakers from the Republicans and Democrats had reached a deal in principle.
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The agreement included $1.4bn in funding for a wall on the US-Mexico border – a key campaign promise of President Donald Trump.
Okasan added that Tokyo investors were mainly snapping up stock in exporters on the back of a cheaper yen.
The dollar changed hands at ¥110.56 in Asian trade, up from ¥110.37 in New York late on Monday and ¥109.68 in Tokyo on Friday.
The rally came after Tokyo shares closed down more than 2% on Friday.
The Japanese market was closed on Monday for a public holiday.
Carmakers were generally higher on the Tokyo market, with Toyota up 2.41% to ¥6 605, Nissan 1.87% to ¥931.4 ahead of quarterly results and Honda 0.80% higher to ¥2 950.
Toshiba dropped 5.89% to ¥3 195 after it indicated it would revise down its full-year operating profit forecast in its third-quarter earnings report due on Wednesday.
SoftBank Group rose 2.44% to ¥10 260 after an announcement that its SoftBank Vision Fund will invest nearly a billion dollars in Silicon Valley startup Nuro, which is working on self-driving delivery vehicles.