Nikkei climbs 3 pct on BOJ easing hopes; Fast Retailing stars

Wed Apr 3, 2013 3:24am EDT

* Nikkei marks biggest one-day gain in almost 2 months
    * Outcome of BOJ policy meeting in focus
    * Fast Retailing soars on bright same-store sales

    By Tomo Uetake
    TOKYO, April 3 (Reuters) - Japan's Nikkei average jumped 3
percent on Wednesday, its biggest one-day rise in almost two
months, on growing expectations that the central bank will
announce further easing steps on Thursday.
    Index heavyweight Fast Retailing Co surged 13.9
percent and contributed 178 positive points to the benchmark
after its Uniqlo casual clothing chain posted a 23.1 percent
rise in same-store sales in March from a year ago.
    The benchmark Nikkei rose 358.77 points to close at
12,362.20 after shedding 3.2 percent in the previous two
sessions. The index, which ended the morning session 1.7 percent
higher, accelerated its upswing in the afternoon. 
    "The Nikkei futures extended their gains in the afternoon,
it's more like a short covering rally," said Masayuki Otani,
chief market analyst at Securities Japan. "You can't overlook
how much only a few heavyweights have push up the benchmark."
    Mobile operator Softbank Corp jumped 5 percent and
was the second top-weighted gainer, contributing 26 positive
points to the Nikkei.
    Analysts said that as selling by short-term investors was
overdone early this week, investors bought stocks on the dips on
Wednesday. 
    Trading, however, was quite moderate, with 3.16 billion
shares changing hands on the broader Topix index versus
last month's daily average of 3.24 billion, as attention was
focused on the Bank of Japan's two-day policy meeting that ends
on Thursday. The Topix climbed 1.9 percent to 1,010.43.
    "In order for the new BOJ leadership to gain the trust of
the market, they should avoid disappointing the market from the
very first," said Eiji Kinouchi, Daiwa Securities senior
strategist. "I think they need to, and will, fire off a
bazooka."
    New BOJ 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.
    "We believe some monetary expansion measures beyond market
expectations should be taken," said Toru Ibayashi, head of
wealth management research at UBS Securities Japan in a note. 
    He said the BOJ's action should renew the weaker yen trend
and added that along with positive earnings results from late
April, Japanese exporters would be able to recoup recent
underperformance.
    Automakers also attracted buying, with Toyota Motor Corp
 adding 3.8 percent and Honda Motor Co gaining
4.6 percent.
    Reflationary stocks with high asset value outperformed on 
hopes for Prime Minister Shinzo Abe's reflationary policy, with
East Japan Railway Co gaining 5.6 percent and West
Japan Railway Co advancing 3.5 percent.
    But banking and real estate shares underperformed, with
Nomura Real Estate Holdings Inc down 1.3 percent.
    "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.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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