Nikkei rises 1.9 pct on Wall Street gains, BOJ easing hopes

Tue Apr 2, 2013 9:31pm EDT

* BOJ two-day policy meeting in focus
    * Fast Retailing jumps on bright same-store sales

    By Ayai Tomisawa
    TOKYO, April 3 (Reuters) - Japan's Nikkei share average rose
1.9 percent on Wednesday, as gains in exporters and reflationary
stocks helped the market recover from losses of more than 3
percent in the past two days.
    Hopes for further monetary easing at the Bank Of Japan's
policy meeting supported sentiment.
    Index heavyweight Fast Retailing Co climbed more
than 8 percent and was the second-most traded stock after its
Uniqlo casual clothing chain posted a 23.1 percent rise in
same-store sales in March from a year ago.
    The Nikkei gained 233.26 to 12,236.69 in mid-morning
trade.
    The BOJ's two-day policy meeting under its new leadership
will kick off on Wednesday. Governor Haruhiko Kuroda is likely
to start open-ended asset purchases immediately, rather than in
2014, boost bond buying and extend the maturity of bonds the
bank buys.
    "Trading may not be active before the important event, but
investors will probably buy on the dips as selling was
overdone," said Yutaka Miura, a senior technical analyst at
Mizuho Securities.
    Long-term foreign investors expect that Japanese equities
will post further gains this year as most companies are likely
to forecast bright earnings for the current fiscal year through
March, analysts said, while easier central bank policy should
also boost growth.
    The broader Topix advanced 1.0 percent to 1,001.24.
    On Tuesday, the Standard & Poor's 500 Index closed at
a record high on positive factory data confirming a steady
recovery in the U.S. economy. 
    On Wednesday, reflationary stocks with high asset value
outperformed, with East Japan Railway Co gaining 3.4
percent, West Japan Railway Co advancing 1.8 percent
and warehouse operator Mitsui-Soko Co rising 3.0
percent.
    Analysts said that exporters and reflationary stocks, which
include banking and real estate stocks, had become the target of
selling by short-term investors as they have outperformed the
market on the back of Prime Minister Shinzo Abe's bold policies
aimed at reigniting the economy.
    Banking stocks and real estate shares, whose performances
are more directly linked to the BOJ's stance, underperformed.
    "Since these stocks have gained sharply this year, investors
want to see if the outcome of the meeting will be priced in to
the market immediately and the stocks will soon give up gains,"
said Masayuki Kubota, senior fund manager at Daiwa SB
Investments.
    Mitsubishi Estate Co fell 0.3 percent, Mitsui
Fudosan Co dropped 0.1 percent and Mitsubishi UFJ
Financial Group shed 0.2 percent while Sumitomo Mitsui
Financial Group was flat.
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