Nikkei rises on BOJ reflation expectations; Fast Retailing jumps
TOKYO (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 (9983.T) 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 .N225 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 .IBNKS.T stocks 1.8 percent.
Sumitomo Mitsui Financial Group (8316.T) gained 2.1 percent, and Mizuho Financial Group (8411.T) and Mitsubishi UFJ Financial Group (8306.T) 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 (8604.T), Japan's top brokerage, rose 2.2 percent and was the fifth-most traded stock on Tuesday morning.
The broader Topix .TOPX added 0.6 percent to 997.86.
Hisamitsu Pharmaceutical Co Inc (4530.T), 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.
(Editing by Chris Gallagher)