Nikkei hits nine-month high as Abe takes over as PM
TOKYO (Reuters) - The Nikkei climbed to its highest point in nine months on Wednesday as the yen fell to a 20-month low on expectations that Japan's new prime minister would push for more aggressive monetary and fiscal policies, boosting shares of exporters like Sony Corp (6758.T).
Shares of real estate and financial companies also benefited from hopes for the new government under Shinzo Abe, who was confirmed as prime minister by the lower house of parliament just before the market close.
The benchmark Nikkei average closed up 1.5 percent or 150.24 points at 10,230.36, its high for the day. That marked its loftiest level since March 27, when it ended at 10,255.15.
The broader Topix added 1.2 percent to 847.71.
"The Nikkei will probably keep refreshing its highs until the end of the year, and will likely maintain its strength through February or so on hopes for the new government to draw out a strong economic policy," said Kenji Shiomura, an equities analyst at Daiwa Securities.
Abe's Liberal Democratic Party surged back to power in an election on December 16, three years after a crushing defeat that ended more than 50 years of almost nonstop rule by the conservative, business-friendly party.
He has promised to push for aggressive monetary easing by the Bank of Japan and big government spending to rescue the economy from its fourth recession since 2000.
The yen on Wednesday traded at 85.38 to the dollar, its weakest since April 2011 on expectations that Abe would pressure the central bank to ease its monetary policy more aggressively.
That pushed up shares of exporters, as a weaker yen boosts their overseas earnings when repatriated. Toyota Motor Corp gained 1.3 percent, Nissan Motor Co (7201.T) added 2.1 percent and Sony rose 4 percent.
Property developer Mitsui Fudosan Co (8801.T) rose 1.7 percent. Banking group Mizuho Financial Group (8411.T) advanced 2.0 percent, while brokerages Nomura Holdings Inc (8604.T) climbed 2.8 percent and Daiwa Securities Co (8601.T) gained 2.6 percent.
Buying of Japanese stocks continued despite signs that they were overbought, although trading volume was thin due to the Christmas holiday. Some 2.79 billion shares changed hands on the main board, below last week's daily average volume of 3.53 billion shares.
After rising about 18 percent over the last six weeks, the Nikkei is in "overbought" territory, with its 14-day relative strength index at 75.94. Above 70 is deemed overbought and could signal that a correction is imminent.
"Most foreign funds have added Japanese shares and there are fewer participants today, but there still is a reason for the Nikkei to rise," said Hideyuki Okoshi, general manager at Chibagin Securities.
(Editing by Chris Gallagher)
- Tweet this
- Share this
- Digg this
- Hong Kong protests approach potential National Day flashpoint
- OPEC oil output hits highest since 2012 on Libya, Saudi-Reuters Survey
- Kurds seize Iraq/Syria border post; Sunni tribe joins fight against Islamic State
- Obama, Modi discuss trade, climate, Islamic State at White House
- UPDATE 3-Drug, medical device companies paid billions to U.S. physicians, hospitals in 2013 -data
U.S. President Barack Obama and Indian Prime Minister Narendra Modi worked to deepen improving ties between their countries on Tuesday, but emerged from their second meeting in two days with little in the way of major agreements. Story | Full Coverage
China final HSBC PMI steady in September on stronger global demand but risks remain Full Article