Nikkei hits 7-mth high, led by exporters on softer yen

Thu Dec 6, 2012 6:30am IST

Related Topics

* Nikkei up 0.6 pct; Topix rises 0.8 pct
    * Nikkei approaches "overbought" territory
    * Exporters lead gainers on softer yen
    * LDP looks set to win a majority on Dec. 16 election

    By Dominic Lau
    TOKYO, Dec 6 (Reuters) - The Nikkei average climbed to a
seven-month high above the key-9,500 mark on Thursday, buoyed by
a weaker yen on persistent speculation the central bank would
adopt bolder action to pull Japan out of deflation under a
likely new government.
    Shinzo Abe, the leader of the main opposition Liberal
Democratic Party who is expected to win a Dec. 16 general
election, has been calling for the Bank of Japan to embark on
"unlimited easing" and set an inflation target of 2 percent. The
latest opinion polls showed the LDP was on course to win a solid
majority.
    His comments have weakened the yen over the past three
weeks, while the Nikkei has rallied 10 percent, led by
exporters.
    The Nikkei rose 0.6 percent to 9,527.67 in
mid-morning trade on Thursday, taking the index to near
"overbought" territory, with its 14-day relative strength index
at 69.9. Seventy or above is deemed overbought.
    "The market has been struggling with this 9,500 level on the
Nikkei a few times. We need a convincing breakthrough there
before it goes anyway," a senior trader at a foreign bank said,
adding that volume has been thinning out lately and his buy and
sell orders were even this morning.
    "We have seen sellers every single day in ETF (exchange
traded fund) formats coming from the domestic side. Anybody who
can take it higher are foreigners. The foreigners right now are
quiet."
    Foreign investors were net buyers of Japanese equities last
week for the third straight week. They bought a net 184.3
billion yen of shares in the week through Dec. 1, data from
Japan's Ministry of Finance showed.
    Exporters in demand on Thursday included Toyota Motor Corp
, TDK Corp, Daikin Industries Ltd and
Honda Motor Co, up between 0.7 and 2.8 percent.
    The yen was quoted at 82.38 to the dollar after falling 0.7
percent to 82.46 yen on Wednesday. It touched a 7-1/2-month low
of 82.84 yen to the dollar on Nov. 22.
    The broader Topix advanced 0.8 percent to 787.87.
    The benchmark Nikkei is up 12.7 percent this year, in line
with a 12.1 percent rise in the U.S. S&P 500 and a 13.2
percent gain in the pan-European STOXX Europe 600 
index.
    But Japanese equities are more expensive than their European
peers, with a 12-month forward price-to-earnings ratio of 12.1
versus STOXX Europe 600's 11.1, data from Thomson Reuters
Datastream showed. The S&P 500 has a 12-month forward P/E of
12.5.
FILED UNDER:

REUTERS SHOWCASE

Oil Prices Fall

Oil Prices Fall

Brent near four-year low after OPEC decides against output cut  Full Article 

Banking Sector

Banking Sector

India says considering plan to reduce stake to 52 pct in state banks   Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

SAARC Summit

SAARC Summit

Summit salvaged after handshake by leaders of India, Pakistan  Full Article 

Social Media

Social Media

Twitter to start tracking users' mobile apps  Full Article 

Forever21 in India

Forever21 in India

Forever21 sets sights on Indian cities, but please hold the hot pants  Full Article 

Japan Economy

Japan Economy

Japan inflation slows in October, output and spending show signs of recovery  Full Article 

Reuters India Mobile

Reuters India Mobile

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