Nikkei set to rise on optimism about easy policy, Wall St gains

Tue Apr 9, 2013 7:32pm EDT

TOKYO, April 10 (Reuters) - Japan's Nikkei share average is
expected to rise on Wednesday, helped by ongoing optimism about
the economic outlook after the Bank Of Japan last week announced
a sweeping monetary expansion campaign.
     Analysts expect overnight gains on Wall Street to also
underpin Japanese equities, but say investors should be cautious
against signs the market may be overbought after the Nikkei's
sharp rise in the past week.
    Market players said the Nikkei was likely to trade between
13,150 to 13,350 on Wednesday after ending flat at 13,192.35 on
the previous day. It tapped an intraday high of 13,331.39 in
that session, its highest level since August 2008.
    Nikkei futures in Chicago closed at 13,300, up 0.8
percent from the close in Osaka of 13,190.
    "The mood remains positive, but selling may be seen if the
index trades above 13,200 as that's what we saw yesterday," said
Yutaka Miura, a senior technical analyst at Mizuho Securities.
    He added that geopolitical tensions on the Korean peninsula
may also crimp demand for riskier equities.
    The Nikkei has gained 4.4 percent since Thursday's BOJ
announcement of massive monetary stimulus. The central bank
plans to inject about $1.4 trillion into the economy in less
than two years by buying government bonds across the yield curve
as well as riskier exchange-traded funds (ETFs).
    The benchmark has surged more than 52 percent since
mid-November, when Shinzo Abe promised expansionist fiscal and
monetary policies, dubbed "Abenomics", to revive Japan's economy
during his election campaign. He was elected prime minister the
following month. 
    The index currently trades 6.5 percent above its 25-day
moving average of 12,399.03. A level above 5 percent is
considered overbought.
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