Nikkei climbs to seven-month closing high on exporters' gains

TOKYO Fri Nov 30, 2012 12:29pm IST

Related Topics

Stocks

   

TOKYO (Reuters) - The Nikkei average hit a seven-month closing high on Friday as a weaker yen, driven by persistent expectations the Bank of Japan will act more boldly under a likely new government after a December 16 election, lifted the shares of exporters.

The Nikkei .N225 has surged 9 percent while the yen has weakened over the past two weeks after Shinzo Abe, leader of the main opposition party, called for the central bank to set an inflation target of 2 percent and embark on "unlimited easing" to pull the economy out of its decade-long deflation.

The rally produced a 5.8 percent rise in the benchmark Nikkei this month, its best monthly performance since February.

The Nikkei ended 0.5 percent higher to 9,446.01 on Friday after trading as high as 9,492.91, or 1 percent up, earlier in the session.

According to Reuters data, the most traded December Nikkei index options were a call with a strike price of 9,750 JNI097L2.OS, 3.2 percent above Friday's close, followed by another call at 10,000 JNI100L2.OS and a put at 9,250 JNI092X2.OS.

But some players were less upbeat on the market, saying domestic investors could turn into sellers when the Nikkei nears the 9,500-mark.

"Their positions are like this ... short on the yen and long on the Nikkei," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Securities. "Buying (in the equities market) is mainly by foreign hedge funds such as commodity trading advisors who are chasing the Nikkei 225 futures higher."

"Domestic players are becoming sellers because they take a cold look at their political climate," he said.

Another Tokyo-based analyst said: "It does feel like people aren't that committed to take a big punt at the end of the year."

Exporters in demand included Canon Inc (7751.T), Nikon Corp (7731.T), semiconductor equipment maker Tokyo Electron Ltd (8035.T) and Nissan Motor Co (7201.T), up between 0.9 and 4.5 percent, as the yen was traded at 82.40 to the dollar, near a 7-1/2-month low of 82.84 yen reached on November 22.

Hitachi Ltd (6501.T) climbed 4.2 percent and Mitsubishi Heavy Industries Ltd (7011.T) advanced 3 percent after they said they would combine their thermal power businesses to better compete against bigger overseas rivals Siemens AG (SIEGn.DE) and General Electric Co (GE.N).

Adding to the upbeat sentiment on Friday, Japan's industrial output unexpectedly rose in October in a sign the world's third-largest economy may have seen the worst of the effects of weak global trade and a diplomatic row with China.

The broader Topix .TOPX index gained 0.3 percent to 781.46, with 2.39 billion shares changing hands, up from Thursday's 1.81 billion and last week's average of 1.95 billion.

In terms of valuations, Japanese equities carry a 12-month forward price-to-earnings ratio of 12, slightly cheaper than U.S. S&P 500's .INX 12.5 but more expensive than the pan-European STOXX Europe 600's .STOXX 11, data from Thomson Reuters Datastream showed.

(Additional reporting by Ayai Tomisawa; Editing by Richard Borsuk)

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

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

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