Nikkei nears four-year high as Japan escapes G20 criticism

TOKYO Mon Feb 18, 2013 12:50pm IST

Men walk past logos at the Tokyo Stock Exchange in Tokyo February 6, 2013. REUTERS/Toru Hanai

Men walk past logos at the Tokyo Stock Exchange in Tokyo February 6, 2013.

Credit: Reuters/Toru Hanai

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei share average jumped 2.1 percent on Monday, led by banks and exporters as the yen softened after Japan escaped direct criticism of its aggressive monetary easing at the weekend's G20 meeting.

The Nikkei added 234.04 points to 11,407.87, close to the 4-year high of 11,498.42 it struck on February 6.

A statement issued by Group of 20 policymakers did not single out Japan, though it said members should refrain from competitive devaluations and that monetary policy should be directed only at price stability and growth.

Investors took the G20's statement as a signal to continue the one-way bets against the yen that paused last week before the meeting. On Monday, the yen was trading at 94.15 to the dollar just above a 33-month low of 94.465 struck one week earlier.

Exporters rose, with Fanuc Corp (6954.T) gaining 2.1 percent and Toshiba Corp (6502.T) 2.5 percent.

"At the G20 meeting, there wasn't as much criticism from emerging countries about the recent yen's weakness as feared. That spurred yen selling," said Kyoya Okazawa, head of global equities at BNP Paribas.

Shares in the financial and real estate sectors contributed to the benchmark's gains as investors took the absence of G20 criticism of Japan's reflationary policies as a sign these can be pursued without sparking friction.

Japan's top three banks were among the six most-traded stocks. Mitsubishi UFJ Financial Group Inc (8306.T) surged 4.9 percent, while Mizuho Financial Group Inc (8411.T) and Sumitomo Mitsui Financial Group Inc (8316.T) added 5.0 and 4.1 percent respectively. The banking sub-index .IBNKS.T was the best-performing sector on the main board, rising 4.8 percent.

"We expect investor interest in Japanese stocks to rise further as the BOJ governor appointment and BOJ's next steps become clearer, and more details emerge of deregulation and other proposals by the Abe administration. We see scope for further share price gains over the next months," Natsumu Tsujino, banking analyst at JPMorgan, wrote in a report.

The real estate sub-index .IRLTY.T was the third best, advancing 3.8 percent. Mitsubishi Estate Co Ltd (8802.T) gained 4.0 percent and Mitsui Fudosan (8801.T) 3.8 percent.

The broader Topix .TOPX rose 2.2 percent to 962.69, in slightly thinner trade, with 3.13 billion shares changing hands.

MORE UPSIDE SEEN

Yen weakness has helped the Nikkei benchmark gain about 32 percent since mid-November, when Shinzo Abe, then leader of the opposition and now prime minister, began calling for bolder fiscal and monetary policy to pull Japan out of deflation.

Nomura Securities, which said that its end-2013 target for the Nikkei remains 12,500, sees 11,800 as a potential near-term target if the dollar trades above 95 to the yen.

Under the current Abenomics-driven market, investors have focused on large-cap and high-risk stocks, but with stock selection becoming increasingly important, return-on-equity will remain a key investment indicator, Nomura said.

It said trading companies offer high ROE and low valuations, and Nomura also is upbeat on machine tool makers and department store operators.

(Additional reporting by Sophie Knight; 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

Election 2014

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Election 2014

Election 2014

Promises and more promises: India’s parties pitch their visions.  Full Article | Full Coverage 

India Markets

India Markets

Sensex slumps 207 points, at 2-1/2 week closing low.  Full Article 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

New Direction

New Direction

CEO Nadella pushes data culture at Microsoft.  Full Article 

Bitcoin ATM

Bitcoin ATM

China gets first bitcoin ATM, skirting bank crackdown.  Full Article 

Strong Sales Volume

Strong Sales Volume

Small is beautiful for Coca-Cola as volumes soar in China  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

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