Nikkei seen testing 20-month high as yen weakens

TOKYO Thu Dec 27, 2012 4:41am IST

People look at a stock quotation board outside a brokerage in a business district in Tokyo December 19, 2012. REUTERS/Toru Hanai

People look at a stock quotation board outside a brokerage in a business district in Tokyo December 19, 2012.

Credit: Reuters/Toru Hanai

Related Topics

Stocks

   

TOKYO (Reuters) - The Nikkei average is expected to open stronger and test a 20-month high on Thursday, led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency sent the yen to a more than two-year low against the dollar.

Separately, Finance Minister Taro Aso said Prime Minister Shinzo Abe has ordered him to compile a stimulus package without adhering to a previously agreed cap on new bond issuance, signaling a more aggressive policy to kick-start the ailing economy.

The Nikkei .N225 is likely to trade between 10,250 and 10,400, strategists said, while Nikkei futures in Chicago closed at 10,330 on Wednesday, up 0.9 percent from the Osaka close of 10,240.

"The Nikkei will test the year-to-date's high. Nikkei futures already cleared above 10,300 in yesterday's night session," said Takashi Hiroki, chief strategist at Monex Inc. "The yen depreciation continues."

Hiroki said expectations of further gains in the new year would likely deter investors from sharp profit-taking on Friday, the last trading day of the year.

The yen was quoted at 85.50 to the dollar on Thursday after hitting a more than two-year low of 85.735 yen on Wednesday.

On Wednesday, the Nikkei climbed 1.4 percent to 10,230.36, hitting a nine-month high and coming close to this year's high of 10,255.15 reached in late March. The broader Topix .TOPX index advanced 1.2 percent to 847.71.

The benchmark Nikkei has rallied 18.1 percent over the past six weeks, taking the year-to-date gain for the Nikkei to 21 percent, outpacing a 12.9 percent rise in the U.S. S&P 500 .INX and a 14.7 percent gain in the pan-European STOXX Europe 600 .STOXX.

Japanese equities carry a 12-month forward price-to-earnings ratio of 12.6, slightly cheaper than the S&P 500's 12.8 but more expensive than STOXX Europe 600's 11.5, data from Thomson Reuters Datastream showed.

> Wall St drops for 3rd day, led by retailers .N > Yen falls sharply as Japan's Abe vows to weaken it (FRX) > Treasuries gain as U.S. fiscal deadline approaches <US/> > Gold up in thin post-Christmas trade; US budget in focus<GOL/> > Oil jumps to 9-week high on U.S. fiscal talks, technicals<O/R>

STOCKS TO WATCH

-- TOYOTA MOTOR CORP (7203.T)

Toyota has agreed to pay as much as $1.4 billion to settle U.S. litigation over claims that its vehicles suddenly and unintentionally accelerated, according to court filings made public on Wednesday.

-- MITSUBISHI UFJ FINANCIAL GROUP (8306.T)

VietinBank CTG.HM, Vietnam's second-biggest partly private lender by assets, is set to sign a deal to sell shares to Bank of Tokyo-Mitsubishi UFJ, making the Japanese lender its strategic investor, a VietinBank official said on Wednesday.

(Reporting by Dominic Lau; Editing by Chris Gallagher)

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

Fuelling Change

REUTERS SHOWCASE

NSEL Fraud

NSEL Fraud

Govt orders Financial Tech to absorb NSEL, liabilities  Full Article 

Stalemate

Stalemate

WTO prepares for crisis talks as India keeps veto on global deal.  Full Article 

Deal Talk

Deal Talk

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

Earnings Season

Earnings Season

HDFC Bank eyes pickup in corporate credit.  Full Article 

JLR China

JLR China

JLR sees 20 percent growth in China sales this year - exec  Full Article 

Iron Ore Imports

Iron Ore Imports

JSW Steel to boost iron ore imports by up to 80 percent.  Full Article 

Pollution Levels

Pollution Levels

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

Remembering Margerie

Remembering Margerie

Total’s "Big Moustache"- bon vivant, deal-maker and risk-taker .  Full Article 

Reuters India Mobile

Reuters India Mobile

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