September 14, 2012 / 1:16 AM / 5 years ago

Nikkei climbs to near 3-week high on Fed stimulus

* Cyclicals gain as Fed stimulus steps boost risk appetite
    * Hitachi rises after lifting H1 dividend
    * Seven & I falls on concerns of weaker outlook

    By Dominic Lau
    TOKYO, Sept 14 (Reuters) - Japan's Nikkei average climbed
1.3 percent to its highest level in nearly three weeks above
9,000 on Friday after the Federal Reserve launched new stimulus
for the U.S. economy.
    The fresh dose of U.S. stimulus boosted risk appetite as
beaten-down cyclicals such as miners and shippers, which have a
relatively higher correlation with the health of the economy,
rallied the hardest.
    The mining sector jumped 3.7 percent, while
shippers rose 4.6 percent and steelmakers 
gained 2.9 percent.
    The Nikkei had advanced 119.58 points to 9,114.73 by
midmorning, breaking above its 200-day moving average at
9,002.78 and t h e 23.6 percent retracement of its rally from July
25 to Aug. 20 at 9,012.
    "We are somewhere between 2 and 2.5 to 1 (buy to sell
orders). A decent amount of flow, I would say ... not much hedge
fund money but long-only primarily," a senior dealer at a
foreign bank said.
    "The thing we are watching is the currency. Japan is going
to continue to underperform so long as the currency strengthens.
 The open question is whether the Bank of Japan is going to step
in and actually does something to the currency."
    He said the other question was whether the BOJ would follow
its U.S. and European counterparts to offer further monetary
easing at its meeting next week.
    The Nikkei is up 7.8 percent this year, underperforming a
16.1 percent gain in the U.S. S&P 500 and an 11.4 percent
rise in the pan-European STOXX Europe 600.
    The yen hit a seven-month high of 77.13 per dollar on
Wednesday, and was quoted at 77.65 yen on Friday. A stronger yen
is usually a negative factor for exporters.
    But so far, shares in many exporters were taking part in the
rally. Toyota Motor Corp rose 1.1 percent, Honda Motor
Co added 0.8 percent and Canon Inc gained 2.9
    The broader Topix index rose 1.3 percent to 753.52.
    Japan's top investment bank Nomura Holdings rose
3.5 percent after it said it had restructured the management
team at its U.S. equities group, which comes a week after it
announced a plan to scale back its traditional stock trading
businesses worldwide.
    Other gainers included Hitachi Ltd, which added 3.1
percent after Japan's biggest industrial electronics company
said it would increase its first-half dividend to 5 yen per
share from 3 yen a year earlier.
    But convenience store operator Seven & I Holdings Co Ltd
 shed 2.1 percent after the Nikkei business daily said
the company's operating profit for March-August would likely
fall 2 percent to 147 billion yen ($1.90 billion), marking its
first decline for the period in three years.
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