Nikkei up for fourth day after Greek deal, bolder easing hope

TOKYO Tue Nov 27, 2012 12:42pm IST

People are reflected on an electronic board displaying a graph showing the movement of Nikkei share average outside a brokerage in Tokyo November 7, 2012. REUTERS/Toru Hanai

People are reflected on an electronic board displaying a graph showing the movement of Nikkei share average outside a brokerage in Tokyo November 7, 2012.

Credit: Reuters/Toru Hanai

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei share average nudged up to a seven-month closing high on Tuesday, supported by a deal on reducing Greece's debt and a comment from Japan's opposition leader calling for bolder monetary easing.

However, analysts cautioned the market's recent surge may be losing momentum after a 9 percent gain in the past two weeks, and big-name exporters weakened as investors took profits.

Domestic-demand driven stocks such as banks and real estate firms still found favor, with Sumitomo Mitsui Financial Group (8316.T) gaining 1.0 percent and Mitsui Fudosan (8801.T) advancing 1.8 percent.

The Nikkei .N225 closed up 0.4 percent at 9,423.30, its fourth straight day of gains and its highest close since April 27.

Japanese opposition leader Shinzo Abe, who is expected to win a December election, said on Tuesday the country cannot restore its fiscal health without overcoming deflation, calling for bolder monetary and fiscal stimulus to revive the economy.

His comment lifted the dollar comfortably above 82 yen and help trim some earlier losses among exporters, whose earnings benefit from a weaker yen. The dollar last traded at 82.27 yen.

"Abe's comments helped sentiment," said Fujio Ando, a strategist at Chibagin Asset Management. "But there may be some correction in the market in the coming days, although the fundamental mood should stay positive."

Traders said investors, who were underweight Japanese stocks, continued to pour new money into the market as the yen has weakened sharply on expectations of a new government determined to pressure the central bank into more easing.

Data showed net pre-market buy orders from foreign houses for a 12th straight day.

EYES ON GLOBAL ECONOMY

Sentiment was also bolstered by news that euro zone finance ministers and the International Monetary Fund clinched an agreement on reducing Greece's debt in a breakthrough to release urgently needed loans to keep the near-bankrupt economy afloat.

"The Greek deal provides comfort somewhat, but to see further gains in the market, we need more catalysts such as further weakening in the yen," said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

Among exporters, Toyota Motor Corp (7203.T), Honda Motor Co (7267.T) and Nikon Corp (7731.T) fell 1.1-1.4 percent. The stocks have risen 14-18 percent over the past two weeks.

"Investors are still staying as buyers, but they are shifting to domestic-demand stocks as they are cautious of the steep rise in exporters," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The market is now expected to focus on the U.S. fiscal policy standoff, which may limit the upside potential for equity markets until there are signs of progress.

Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country's fiscal crisis, while holding firm against income tax rate increases for the wealthy sought by Democrats.

Notable gainers included Toyobo Co (3101.T) which rose 4.7 percent to a 4-1/2 month high of 111 yen after Daiwa Securities hiked the fiber maker's rating by two notches to 'buy' from 'neutral', saying operations such as its life science business may see a profit recovery.

The Nikkei has added 11.45 percent so far this year, putting its performance on a par with the U.S. S&P 500's .INX 11.82 percent rise and the pan-European STOXX Europe 600's .STOXX 11.23 percent gain.

The broader Topix .TOPX added 0.3 percent to 781.60.

(Editing by Eric Meijer and Richard Pullin)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Fire Accident

Fire Accident

Firecracker market up in flames near Delhi  Video 

Yahoo Result

Yahoo Result

Yahoo ekes out Q3 revenue gain despite display ad weakness  Full Article 

Deal Talk

Deal Talk

Smartphone repair company B2X steps up expansion with Indian deal.  Full Article 

Reuters India Mobile

Reuters India Mobile

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