Nikkei climbs to 53-month high, buoyed by hopes for new BOJ chief

Sun Mar 3, 2013 10:36pm EST

* Nikkei rises 0.6 pct, Topix up 1.1 pct
    * Real estate firms, financials lead rally

    By Tomo Uetake
    TOKYO, March 4 (Reuters) - Japan's Nikkei average climbed to
a 53-month high on Monday as real estate firms and financials
advanced on expectations of  aggressive easing from the new
leadership team at the central bank.
    The Nikkei rose 0.6 percent to 11,674.90 by the
midday break, eclipsing the previous 53-month high of 11,662.52
hit on Feb. 25. It rose as much as 1.4 percent to 11,767.68
earlier in the session.
    "Foreign investors still have high expectations for
Abenomics and Japan's (monetary) policies under the new
leadership," said Yoshihiko Tabei, general manager of capital
markets research at Kazaka Securities, referring to Prime
Minister Shinzo Abe's reflationary fiscal and monetary policies.
    On Monday, Haruhiko Kuroda, the government's nominee to be
the next Bank of Japan governor, said huge purchases of
longer-dated Japanese government bonds is a natural way to ease
monetary policy, although central bankers must monitor the
side-effects.
    Kuroda added the size and type of assets the BOJ now buys is
not enough to achieve its 2 percent inflation target.
 
    "Some investors may sell stocks if Kuroda and (nominee to be
one of the deputy governors Kikuo) Iwata, who will speak at the
parliament on Tuesday, don't say anything beyond their
expectations. Yet, there should be other players buying stocks
on the dip."
    The real estate sector was the top performer,
gaining 4.9 percent. Sumitomo Realty & Development 
jumped 5.6 percent and Mitsubishi Estate climbed 5.1
percent.
    The sector has climbed more than 57 percent since
mid-November, outpacing a nearly 38 percent rally in the Nikkei,
after Abe embarked on bold fiscal expansionary policies to fight
Japan's chronic deflation. 
    Securities firms, banks and other
financials also outperformed the overall market.
    The broader Topix index gained 1.1 percent to
995.21, while some exporters also got a helping hand from a
weaker yen, which lost 1 percent to 93.685 to the dollar on
Friday after the upbeat U.S. data.
    U.S. manufacturing activity expanded last month at its
fastest clip in 20 months, while U.S. consumer sentiment also
rose in February as Americans turned more optimistic about the
job market.   
    The Japanese currency was quoted at 93.33 to the dollar on
Monday. Sony Corp rose 3.7 percent.
    UBS upgraded Japanese equities to 'neutral' from
'underweight' in its global portfolio model.
    "Whilst we are relatively sceptical on the ability of the
administration to generate inflation and economic growth, we see
a likely period of continued reflationary rhetoric and
supportive news flow ahead of the summer elections for the upper
house," UBS strategists said in a note.
    "The broader improvement in the U.S. economy and pick up in
durables goods orders should help Japan, particularly with the
weaker yen, over a longer-term horizon."