TOKYO (AP) _ Tokyo stocks soared at the open Tuesday as investors, returning from a three-day weekend, were encouraged by Wall Street's rally and the dollar's surge Monday to a one-month high against the yen. The dollar also rose sharply against the yen in Tokyo.

The Nikkei Stock Average of 225 issues were up 134.07 points, or 1.27 percent, at 10,693.66 at Tuesday's open. On Friday, the previous trading session, the index dropped 135.97 points, or 1.27 percent.

The dollar was trading at 108.98 yen at 9 a.m., up 1.83 yen from late Friday in Tokyo but below the 111.19 yen it bought in New York late Monday. The greenback hit a fresh one-month high of 111.51 yen in trading.

As Japanese markets opened, blue chip exporters and banks were expected to gain after being hit by profit-taking in two straight sessions of falls last week. Japanese exporters were set to benefit as the dollar regained its foothold. A stronger dollar helps boost their overseas profits when converted back into yen.

The broader Tokyo Stock Price Index opened up 11.96 points, or 1.15 percent, to 1,055.32 Tuesday. The TOPIX, which charts more than 1,000 of Japan's largest companies, fell 10.49 points, or 1 percent, to 1,043.36 on Friday.

In New York Monday, stocks rallied to more than 12-month highs as investors welcomed reports of strong growth in the nation's manufacturing sector and a hefty rise in construction spending.

The tech-heavy Nasdaq was up 35.49, or 1.8 percent, at 1,967.70 _ its best close since Jan. 17, 2002, when it stood at 1,985.82.

The Dow Jones industrial average closed up 57.34, or 0.6 percent, at 9,858.46 _ the highest closing level for the Dow since May 31, 2002, when it stood at 9,925.25.

In currencies, the euro was mixed against the dollar and yen. The common European currency was quoted at $1.1455, down from $1.1632 late Friday. Against the yen, it bought 126.92 yen, up from 126.88 yen.

The yield on Japan's benchmark 10-year government bond rose to 1.5150 percent from 1.4600 percent Thursday. Its price fell 0.47 to 99.01.

Japanese financial markets were closed Monday for Culture Day, a national holiday.

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