Nikkei rises to highest since July 2008, developers and banks gain

Wed Apr 10, 2013 9:36pm EDT

* Autos remain attractive among exporters - traders
    * 100 yen to dollar big milestone - fund
    * More buying may be seen if yen weakens to 100 to dollar -
fund

    By Ayai Tomisawa
    TOKYO, April 11 (Reuters) - Japan's Nikkei share average
rose to its highest level since July 2008 on Thursday morning as
the central bank's unprecedented stimulus measures continued to
lure buyers for reflationary stocks like property developers and
banks.
    The Nikkei rose 1.3 percent to 13,455.70 in
mid-morning trade after earlier rising to 13,496.28, the highest
since July 2008.
    Analysts said a rise in U.S. stocks to record highs also
underpinned Japanese equities.
    Reflationary stocks like financials and asset-related shares
attracted buying, while auto shares outperformed on hopes that a
weakening yen will lift their earnings.
    Mitsui Fudosan Co gained 2.5 percent and Mitsubishi
Estate Co added 2.1 percent, while Mitsubishi UFJ
Financial Group rose 2.4 percent. 
    "The current theme in the market is 'beating deflation', not
the weak yen, so although a weak yen should lift exporters to
some extent, asset-related stocks and financial stocks are more
attractive to foreigners," said Kenichi Hirano, a strategist at
Tachibana Securities.
    He added that lingering worries about the euro zone's debt
problems and growth in emerging markets may cap investor
appetite for exporter shares.
    But traders said that investors are selective, and among
bellwether exporters, autos remain popular among foreign
investors as they are highly competitive in the global market
compared to electronics.
    Toyota Motor Corp rose 5.1 percent, Honda Motor Co
 gained 3.0 percent, while Sony Corp added 1.7
percent.
    The Topix gained 1.5 percent to 1,137.08.
    The massive stimulus steps unveiled by the Bank of Japan
last week and the government's fiscal expansionary measures have
continued to drive demand for Japanese equities. The Nikkei has
surged over 50 percent since November and the yen has fallen to
four-year lows versus the dollar on the back of the bold
monetary and fiscal expansionist policies.
     Before the opening bell, Japan's February machinery orders
data was out, which rose at the fastest pace in since mid-2011
in a sign that capital spending could pick up this year.
    "It may take a while to see companies increase capital
spending, but the figures were generally good," said Masaru
Hamasaki, a senior strategist at Sumitomo Mitsui Asset
Management.
    But further gains in the Nikkei will likely depend on the
yen's move, he said.
    "As long as the dollar is hovering just below 100 yen,
investors may not chase the market higher. The 100-mark is a big
milestone, so if it reaches that level, more buying will be
seen."
    The yen last traded at 99.56 yen to the dollar. On
Wednesday, the dollar hit a four-year high of 99.88 yen
.