Nikkei hits highest closing level in 6 years on Fed tapering

Japan's Nikkei share average rose to its highest close in six years on Thursday on the back of a big drop in the yen after the US Federal Reserve announced it would start unwinding its historic stimulus.

The Fed said it would reduce its monthly asset purchases by $10 billion to $75 billion, and indicated that its key interest rate would stay at rock-bottom even longer than previously promised.

Japanese equities were bolstered by a surge in the dollar/yen to over five-year highs in the wake of the Fed decision, underscoring the benefits of a weak currency for Japan's export-reliant economy.

The Nikkei added 1.7 per cent to close at 15,859.22, its highest close since December 2007. During trade, it rose as high as 15,891.82, a hair's breath away from its May high of 15,942.60.

It was a third day of gains for the Nikkei.

The Topix gained 1.0 per cent to 1,263.07, with all of its 33 subsectors in positive territory. Volume was high, with 2.9 billion shares changing hands.