Nikkei set to revist 4-1/2 highs on Fed optimism, BOJ easing hopes

Wed Mar 20, 2013 7:38pm EDT

TOKYO, March 21 (Reuters) - Japan's Nikkei share average is
expected to revisit 4-1/2 year highs tapped recently on
Thursday, bolstered by the Federal Reserve's pledge to keep
supporting the economy through stimulus, and as investors expect
further easing steps under the Bank of Japan's new leadership. 
    Market players said the Nikkei was likely to trade between
12,500 to 12,700, extending gains from Tuesday, when the index
jumped 2.0 percent to 12,468.23 as fears receded that a
controversial bailout proposal for Cyprus could reignite the
euro zone debt crisis. Markets were closed on Wednesday for a
national holiday.
    If the Nikkei tops the 4 1/2 year high of 12,560.95 level
tapped on March 15, it will yet again mark the highest since
early September 2008.
    Nikkei futures in Chicago closed at 12,580, up 1.3
percent from the close in Osaka of 12,420 on Tuesday.
    On Wednesday, Haruhiko Kuroda, an advocate of aggressive
easing, took over the central bank's helm along with his two
deputies Kikuo Iwata and Hiroshi Nakaso.
    "The market expects easing at its first meeting (on April
3-4) under the new leadership, so until then, the market should
stay strong," said Toshihiko Matsuno, a senior strategist at
SMBC Friend Securities.
    He added that investors were relieved after the Fed said it
will retain its $85 billion monthly bond-buying programme to
support the economy. 
    While analysts are bullish about the Nikkei's outlook, they
said the Japanese market is still vulnerable to the yen's rise. 
  
    "Excessive worries about a bailout on Cyprus have receded,
but we still need to stay alert on currency moves as we were
caught off-guard by the yen's rise the other day" when the
controversial Cyprus bailout plan rattled markets, Matsuno said.
"We were reminded that the yen could be bought when investors
want to avoid risks."
    Cypriot leaders held crisis talks on Wednesday to avoid a 
financial meltdown a day after the country's parliament rejected
a tax on bank deposits, which had been proposed over the weekend
by European Union officials. 
        
> Wall St ends higher as Fed keeps stimulus in place       
> Dollar rises vs yen after Fed; euro comes off lows     
> Gold slips after Fed maintains policy, euro rise aids  
> Brent oil rises from 3-month low as Cyprus concern eases 
    STOCKS TO WATCH
    
    --Tokyo Electric Power Co 
    After a power outage announcement by Tokyo Electric Power Co
 earlier this week, the U.N. atomic energy agency said
on Wednesday that Japanese authorities have announced that the
cooling systems at all spent fuel pools at the Fukushima nuclear
power plant have resumed operations. 
    
    --All Nippon Airways 
    ANA, the biggest customer for Boeing Co's 787
Dreamliner, wants the planemaker to compensate it in cash,
rather than discounts on future purchases, for losses racked up
since the aircraft was grounded worldwide in mid-January, said a
person familiar with ANA's intention.
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