Nikkei climbs to near 3-week high on Fed stimulus

TOKYO Fri Sep 14, 2012 7:56am IST

A stock quotation board is seen through a hole of a leaf outside a brokerage in Tokyo September 12, 2012. REUTERS/Toru Hanai

A stock quotation board is seen through a hole of a leaf outside a brokerage in Tokyo September 12, 2012.

Credit: Reuters/Toru Hanai

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei average climbed 1.3 percent to its highest level in nearly three weeks above 9,000 on Friday after the Federal Reserve launched new stimulus for the U.S. economy.

The fresh dose of U.S. stimulus boosted risk appetite as beaten-down cyclicals such as miners and shippers, which have a relatively higher correlation with the health of the economy, rallied the hardest.

The mining sector .IMING.T jumped 3.7 percent, while shippers .ISHIP.T rose 4.6 percent and steelmakers .ISTEL.T gained 2.9 percent.

The Nikkei had advanced 119.58 points to 9,114.73 by midmorning, breaking above its 200-day moving average at 9,002.78 and the 23.6 percent retracement of its rally from July 25 to August 20 at 9,012.

"We are somewhere between 2 and 2.5 to 1 (buy to sell orders). A decent amount of flow, I would say ... not much hedge fund money but long-only primarily," a senior dealer at a foreign bank said.

"The thing we are watching is the currency. Japan is going to continue to underperform so long as the currency strengthens.

The open question is whether the Bank of Japan is going to step in and actually does something to the currency."

He said the other question was whether the BOJ would follow its U.S. and European counterparts to offer further monetary easing at its meeting next week.

The Nikkei is up 7.8 percent this year, underperforming a 16.1 percent gain in the U.S. S&P 500 .INX and an 11.4 percent rise in the pan-European STOXX Europe 600.

The yen hit a seven-month high of 77.13 per dollar on Wednesday, and was quoted at 77.65 yen on Friday. A stronger yen is usually a negative factor for exporters.

But so far, shares in many exporters were taking part in the rally. Toyota Motor Corp (7203.T) rose 1.1 percent, Honda Motor Co (7267.T) added 0.8 percent and Canon Inc (7751.T) gained 2.9 percent.

The broader Topix index rose 1.3 percent to 753.52.

Japan's top investment bank Nomura Holdings (8604.T) rose 3.5 percent after it said it had restructured the management team at its U.S. equities group, which comes a week after it announced a plan to scale back its traditional stock trading businesses worldwide.

Other gainers included Hitachi Ltd (6501.T), which added 3.1 percent after Japan's biggest industrial electronics company said it would increase its first-half dividend to 5 yen per share from 3 yen a year earlier.

But convenience store operator Seven & I Holdings Co Ltd (3382.T) shed 2.1 percent after the Nikkei business daily said the company's operating profit for March-August would likely fall 2 percent to 147 billion yen, marking its first decline for the period in three years.

(Additional reporting by Sophie Knight; Editing by Chris Gallagher)

FILED UNDER:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage