Nikkei posts biggest 1-day gain in 3-weeks, up for seventh straight month

Thu Feb 28, 2013 2:52am EST

* Nikkei rises 2.7 pct helped by futures-led purchases
    * Well-bid Italian debt sale, upbeat U.S. data buoy
    * Exporters, real-estate stocks outperform

    By Tomo Uetake
    TOKYO, Feb 28 (Reuters) - Japan's Nikkei average climbed 2.7
percent on Thursday to post a seventh straight monthly rise, its
longest such winning streak since 2006, underpinned by easing
concerns over political turmoil in Italy and upbeat U.S.
economic data. 
    The Nikkei rose 305.39 points to 11,559.36, breaking
above its five-day moving average of 11,452.12 and nearing its
53-month high of 11,662.52 hit on Monday, and was up 3.8 percent
in February. Thursday's move marked the biggest one-day
percentage rise in three weeks.
    "The Nikkei made up ground lost in the previous session,
thanks to futures-led purchases associated with Nomura (Asset
Management)'s launch of two investment trusts," said Mitsushige
Akino, executive director at Ichiyoshi Asset Management.
    A trader at a Japanese brokerage said the trusts with a
combined size of about 75 billion yen ($820 million) were
picking up stocks in the market, driving the Nikkei higher.
    Currency-sensitive stocks that were heavily sold off in the
previous two sessions also helped the bounce, with Toyota Motor
Corp up 3.5 percent, Honda Motor Co gaining
3.8 percent and Canon Inc adding 4 percent. 
    "It was certainly a great chance to buy" after the past two
days, said Stefan Worrall, director of equity sales at Credit
Suisse in Tokyo.
    "What we had coming into this week was some suggestion that
the market was stretched. The market was due for a correction.
It was well telegraphed and well discussed. There had been other
factors too contributing to the uncertainty, such as the Italian
    Sentiment on the day got a boost from U.S. Federal Reserve
Chairman Ben Bernanke restating the Fed's commitment to monetary
stimulus, while Wednesday's better U.S. economic data also
underpinned risk appetite.
    A gauge of planned U.S. business spending recorded its
largest increase in more than a year in January and contracts to
buy previously owned U.S. homes approached a near three-year
high last month. Investors were also relieved after a well-bid
Italian debt auction.
    Italy's borrowing costs rose to their highest in four months
on Wednesday at the first bond auction since this week's
inconclusive election but solid demand from domestic investors
eased fears that the political deadlock could destabilize
Europe's second-biggest sovereign debt market. 
    The broader Topix index gained 2.3 percent to 975.66
in relatively active trade, with 3.29 billion shares changing
hands. Last week's average daily volume was 2.93 billion shares.
    Analysts said the short-term correction seems to have run
its course and the Japanese market is heading towards retesting
the 53-month highs next week mainly on hopes for aggressive
    On Thursday, as widely expected, Prime Minister Shinzo Abe
nominated Asian Development Bank President Haruhiko Kuroda, an
advocate of monetary easing, as its next central bank chief, and
academic Kikuo Iwata and BOJ official Hiroshi Nakaso as BOJ
deputy governors. 
    The benchmark Nikkei has rallied nearly 32 percent since
mid-November as the yen weakened after Abe's administration
pursued bold fiscal expansionary policies and aggressive
monetary easing aimed at reviving the economy.
    The real estate sector was the second best
sectoral performer, up 4.6 percent.
     Among other notable gainers, GS Yuasa Corp, which
makes lithium-ion batteries for the Dreamliner, surged 7.5
percent after Boeing Co said there was no dispute with
the Japanese firm about the proposed battery fix.
    Komatsu Ltd rose 3.7 percent after the Nikkei
newspaper said the construction machinery maker was expected to
forecast a 30 percent jump in operating profit for the fiscal
year ending March 2014 from its estimate of 230 billion yen for
this business year.