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Tokyo's Olympic bid success boosts Nikkei

LONDON Japanese stocks outperformed others Monday after Tokyo's successful bid to host the 2020 Olympic Games boosted sentiment over the future of the world's No. 3 economy.

The Nikkei 225 jumped nearly 2.5 percent to close at 14,205.23 with traders hoping the Olympics will provide a boost to the construction sector, where the government is already spending heavily as part of its program to get the economy out of its two-decade stagnation. Figures showing that the Japanese economy grew at an annualized rate of 3.8 percent in the second quarter of the year instead of the previous estimate of 2.6 percent also boosted sentiment.

"In Japan, the recent optimism about the economy continued over the weekend after the country managed to secure the 2020 Olympics, raising expectations of a confidence and a construction boost," said Michael Hewson, senior market analyst at CMC Markets.

In Europe, the mood was fairly lackluster amid a dearth of economic news and ongoing uncertainty over a military strike on Syria. The FTSE 100 index of leading British shares was down 0.1 percent at 6,524 while Germany's DAX fell the same rate to 8,271. The CAC-40 in France was 0.4 percent lower at 4,032.

U.S. stocks were poised for a flat opening, with Dow futures 0.1 percent lower and the broader S&P 500 futures unchanged.

As well as monitoring developments over Syria, particularly the return of Congress in the U.S., traders around the world will continue to monitor the U.S. economic releases to gauge whether the Federal Reserve will start to reduce its monetary stimulus this month. Last Friday's mixed U.S. jobs data failed to clarify the picture of whether the Fed will begin the so-called "tapering" of its $85 billion worth of monthly asset purchases.

"While Syria is likely to be the biggest driver of financial markets again this week, next week's Fed meeting is also going to have a significant impact as well," said Craig Erlam, market analyst at Alpari. Earlier, traders in Asia were also lifted by positive Chinese trade numbers, which helped the benchmark Shanghai index surge 3.4 percent to 2,212.52. Hong Kong's Hang Seng added 0.6 percent to end at 22,750.65.

Australian markets were also in focus Monday after a weekend election victory for the country's first conservative government in six years. Prime Minister-elect Tony Abbott has pledged to repeal a 30 percent tax on coal and iron ore miners' profits, which could help commodities companies. Mining shares outperformed the index, with BHP Billiton up 1.4 percent in Sydney, and Rio Tinto 1 percent higher. Overall though, the stock market advance was modest as the victory was widely expected, with Australia's S&P/ASX 200 rising 0.7 percent to 5,181.50.

Trading in other financial markets was also fairly subdued. In oil markets, the benchmark New York crude price was down 30 cents at $110.23 per barrel in electronic trading on the New York Mercantile Exchange. In currencies, the euro rose 0.1 percent to $1.3188, while the dollar fell 0.2 percent to 99.49 yen.