Japan's Nikkei set to post best yearly gain since 2005

TOKYO Fri Dec 28, 2012 4:37am IST

A pedestrian passes an electronic monitor displaying graphs of stock indices outside a brokerage in Tokyo December 27, 2012. REUTERS/Yuriko Nakao

A pedestrian passes an electronic monitor displaying graphs of stock indices outside a brokerage in Tokyo December 27, 2012.

Credit: Reuters/Yuriko Nakao

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TOKYO (Reuters) - Japan's Nikkei share average is expected to open higher on Friday, on track to log its best yearly gain since 2005, buoyed by a weaker yen on expectations of aggressive monetary stimulus under new Prime Minister Shinzo Abe.

The Nikkei .N225 is likely to trade between 10,300 and 10,450, strategists said, while Nikkei futures in Chicago closed at 10,405 on Thursday, up 0.3 percent from the Osaka close of 10,370.

"Further gains are definitely possible, with the sharply weaker yen in focus," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.

Yen selling has accelerated in the past two months on speculation Abe will pursue policies to weaken the currency, which has hurt Japanese exporters' overseas earnings when repatriated and competitiveness.

The yen reached a more than two-year low of 86.345 to the dollar on Friday. The Japanese currency has lost 12 percent against the greenback this year, heading for its biggest annual loss since 2005.

On Thursday, the Nikkei advanced 0.9 percent to 10,322.98 to a 21-month high, while the broader Topix .TOPX index rose 0.8 percent to 854.09.

The benchmark Nikkei has rallied 19.1 percent over the past six weeks, taking the year-to-date gain for the Nikkei to 22.1 percent in local currency, heading for its best yearly gain since 2005.

> Wall St rebounds on House session, but off for 4th day .N > Yen extends weakness; dollar slips as US fiscal talk eyed(FRX) > Treasuries climb as U.S. near 'fiscal cliff' <US/> > Gold up again but gains small as fiscal crisis hedge <GOL/> > Oil eases as U.S. budget uncertainty drags on <O/R>

STOCKS TO WATCH

--POWER COMPANIES

Japan's idled nuclear reactors will gradually be restarted under the newly-elected Prime Minister Shinzo Abe as the units receive the all-clear from the country's Nuclear Regulation Authority, the Nikkei reported.

--TOSHIBA CORP (6502.T)

Toshiba is in talks with three parties, including U.S. engineering firm Chicago Bridge and Iron Company NV (CBI.N), to sell a portion of its stake in its nuclear power unit Westinghouse, according to media reports.

--FUJITSU LTD (6702.T)

Fujitsu is likely to miss its personal computer sales target this year due to sluggish demand in crisis-hit Europe as well as a backlash against Japanese products over regional tensions with China.

(Reporting by Dominic Lau and Lisa Twaronite; Editing by Eric Meijer)

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