Nikkei rises to 1-week high, led by exporters as yen weakens

Wed Nov 14, 2012 8:57pm EST

* Nikkei up 1 pct, Topix rises 1.1 pct
    * Sony tumbles after saying to issue convertible bonds
    * Banks in demand after H1 results

    By Dominic Lau
    TOKYO, Nov 15 (Reuters) - Japan's Nikkei rose to a one-week
high on Thursday, supported by gains for exporters as hopes that
a new government could lead to easier monetary policy weakened
the yen, but Sony sank on a fundraising plan.
    Sony slumped 10.3 percent after the consumer
electronics maker said it will raise $1.9 billion through a sale
of convertible bonds, a third of which will be used for
investment in scandal-hit Olympus Corp. It was the most
traded stock on the main board by turnover.
    But other exporters bounced as the yen was traded at 80.24
to the dollar, not far from a one-week low of 80.31 yen touched
on Wednesday after Prime Minister Yoshihiko Noda unveiled plans
to dissolve parliament's lower house on Friday for a snap
election on Dec. 16. The main opposition Liberal Democratic
Party (LDP) is expected to win the poll.
    Among exporters, Toyota Motor Corp, Honda Motor Co
, Canon Inc and industrial robot maker Fanuc
Corp climbed between 1.7 and 2.5 percent.
    "Everyone is expecting Shinzo Abe from the LDP to be the
next prime minister. He will pressure the BOJ to conduct bold
monetary easing by setting a 2 to 3 percent inflation target,"
said Shun Maruyama, chief Japan equity strategist at BNP
Paribas. "In the near-term, we can be bullish on the Nikkei and
bearish on the Japanese yen."
    The Nikkei advanced 1 percent to 8,749.36, breaking
above its five-day moving average at 8,701.98, as local
investors shrugged off concerns about the prospect of protracted
negotiations to resolve fiscal gridlock in the United States.
    Comments by U.S. President Barack Obama that he won't sign
off on more tax cuts for the wealthy, and unyielding remarks
from Republican leaders earlier this week, signal a long period
of negotiation and brinkmanship that could leave a cloud of
uncertainty over the economy.
    Worries over the so called 'fiscal cliff' in the United
States have been weighing on global equities, including Japanese
stocks, with the Nikkei falling for seven sessions in a row from
Nov. 5 to 13.
    The benchmark had lost 4.3 percent during the losing streak,
its longest such run in seven months. But it is still up 3.5
percent so far this year.
    The broader Topix gained 1.1 percent to 729.98 on
Thursday.
    Maruyama said it was "a bit risky" to chase exporters given
the fiscal issue in the United States and the euro zone debt
crisis. 
    Banks and real estate companies were the best bet to play
the rally in Japanese equities in the short-term, he added.
    Japan's megabanks were in demand after they reported their
first-half results after the market close on Wednesday.
    Mitsubishi UFJ Financial Group, Sumitomo Mitsui
Financial Group and Mizuho Financial Group 
were up between 2.3 and 3.2 percent.
    The real estate sector climbed 2.7 percent, with
Sumitomo Realty & Development Co Ltd up 3.4 percent and
Mitsui Fudosan Co Ltd adding 3.2 percent.
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