Nikkei rises on BOJ reflation expectations; Fast Retailing jumps

Mon Mar 4, 2013 8:17pm EST

* Nikkei rises 0.8 pct; Topix up 0.6 pct
    * Banks up on expectations of reflationary policy
    * Fast Retailing up on strong Uniqlo Japan sales

    By Dominic Lau
    TOKYO, March 5 (Reuters) - The Nikkei stock average advanced
on Tuesday as the confirmation hearings of Bank of Japan
leadership nominees boosted expectations of further easing by
the central bank, while Fast Retailing rose sharply after
reporting strong sales.
    Fast Retailing Co climbed 4 percent and was the top
weighted gainer on the Nikkei after its Uniqlo casual-clothing
chain posted a 9.6 percent year-on-year increase in same-store
sales in Japan last month.
    The Nikkei was up 0.8 percent at 11,746.90 in
midmorning trade after rising as high as 11,767.61. That was
just shy of a 53-month intraday high of 11,767.68 hit on Monday
when Haruhiko Kuroda, the nominee for BOJ governor, outlined a
forceful policy to defeat deflation.
    "(Kuroda) is the absolutely perfect guy in there and
probably the best one for the stock market," said Nicholas
Smith, Japan strategist at CLSA.
    "This is absolutely not a yen story. This is about an asset
price reflation story, so don't concentrate your forces in
exporters, concentrate on ... banks, brokers and real estate,"
Smith said.
    Tuesday's confirmation hearing of Kikuo Iwata, nominee for
one of the deputy BOJ governor posts, was also expected to
support the market because the academic is known as an advocate
of unconventional monetary policy.
    Such expectations of reflationary policies lifted the
subindex of bank stocks 1.8 percent.
    Sumitomo Mitsui Financial Group gained 2.1 percent,
and Mizuho Financial Group and Mitsubishi UFJ Financial
Group both added 1.5 percent. They were the three
most-traded stocks on the main board by turnover.
    The sector has rallied more than 53 percent since
mid-November after Prime Minister Shinzo Abe called on the BOJ
to embark on bold monetary policy to whip deflation, outpacing a
35.5 percent rise in the benchmark Nikkei during the same
period.
    Nomura Holdings, Japan's top brokerage, rose 2.2
percent and was the fifth-most traded stock on Tuesday morning.
    The broader Topix added 0.6 percent to 997.86.
    Hisamitsu Pharmaceutical Co Inc, however, sank 5.4
percent after a panel of advisers to the U.S. Food and Drug
Administration recommended that the agency reject a drug for hot
flashes associated with menopause made by Hisamitsu's subsidiary
Noven Pharmaceutical Inc.
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