Nikkei rises above 12,000, exporters lead gains

Wed Mar 6, 2013 10:02pm EST

* Exporters lead gains as dollar hits 1 week high vs yen
    * Sharp gives up some of previous day's sharp gains
    * Near-term correction may be possible - analyst

    By Ayai Tomisawa
    TOKYO, March 7 (Reuters) - Japan's Nikkei share average rose
above 12,000 on Thursday for the first time in 4-1/2 years, as
exporters gained on risk appetite boosted by a record high on
Wall Street and the prospect of Japan soon adopting an
aggressive reflationary monetary policy.
    The Nikkei rose 0.6 percent to 12,004.37 by the
midday break after rising to as high as 12,069.60, its highest
level since September 2008.
    Exporters led the gains as the dollar hit a one-week high
against the yen after a report showed U.S. private-sector
employers added a larger-than-expected 198,000 jobs in February.
    "Foreign investors are main buyers of exporters," said
Tetsuro Ii, the chief executive of Commons Asset Management.
    "Exporters have gained sharply recently and they have become
expensive," he said, adding that these valuations would likely
be justified when earnings recover on the back of a weaker yen.
    The Nikkei has gained about 16 percent this year,
outperforming its global peers as the yen had declined sharply 
on calls by new Prime Minister Shinzo Abe for aggressive easing.
    By comparison, the Dow has added 9.1 percent, the
Standard & Poor's 500 Index has gained 8.1 percent while
the pan-European FTSEurofirst 300 index has advanced
4.6 percent over the same period.
    "Our investment view on Japanese equities remains neutral
and we still prefer the exporter companies mainly because we
believe the weaker yen will bring a positive impact to their
earnings for the quarter ending March," Toru Ibayashi, head of
wealth management research of UBS Securities Japan, wrote in a
note.
    But he added that the yen's weakening momentum has started
to slow, which may lead investors to take profit on some stocks
that have outperformed.
    While long-term sentiment in Japanese stocks remains
positive, analysts also said that a near-term correction was
possible.
    "As soon as the Nikkei trades 5 percent above its 25-day
moving average, we see selling immediately. The index is
unlikely to allow a wide distance to its 25-day moving average,"
said Kenichi Hirano, strategist at Tachibana Securities.
    The Nikkei's 25-day moving average was last at 11,416.39,
5.2 percent below the midday level.
    On Thursday, the Bank of Japan is likely to keep monetary
policy unchanged, holding fire for new leaders who are expected
adopt bolder measures to end nearly 20 years of mild deflation.
 
    The two-day meeting that started on Wednesday is the last
for Governor Masaaki Shirakawa and his two deputies before they 
leave on March 19.
    Among exporters, Honda Motor Co gained 1.0 percent,
Mazda Motor Corp rose 3.6 percent and Hitachi Ltd
 added 1.1 percent.
    GS Yuasa Corp, the battery maker for the Boeing
 787 Dreamliner, jumped 8.2 percent to an 11-month high,
after reports said U.S. safety regulators are poised to approve
within days a plan to allow Boeing to begin flight tests of the
now-grounded passenger jet with a fix for its fire-prone 
batteries. 
    Sharp Corp gave up some of the gains it made a day
earlier after sources said South Korea's Samsung Electronics Co
Ltd is set to invest about $110 million in the
struggling firm. The news was later confirmed by the company.
    The stock fell 6.5 percent after gaining 14 percent on
Wednesday.
    Wall Street was mostly higher on Wednesday, with the Dow
hitting another record, helped by the private payroll survey
that bodes well for the monthly jobs report due on Friday.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.