Nikkei surges to multi-year highs as dollar breaks above 100 yen, exporters climb

Thu May 9, 2013 9:01pm EDT

* Nikkei option settlement lifts resistance level - analysts
    * Nikkei on track to post biggest weekly gain since Dec 2009
    * Profit-taking possible in late trade - analyst

    By Ayai Tomisawa
    TOKYO, May 10 (Reuters) - The Nikkei share average surged to
another five-year high on Friday as the U.S. dollar managed to
break above the elusive 100 yen mark, with exporters leading the
charge as the Japanese currency's new lows looks set to further
boost corporate earnings.
    The market is up 6.3 percent so far this week, on track for
its biggest weekly gain since December 2009.
    "There is strong demand for currency-sensitive exporters
today... even stronger than recent days," said a fund manager at
a U.S. asset management firm. 
    "Short-term investors are the main buyers, while long-term
investors have yet to catch up with the steep rises recently.
When they start buying aggressively, these exporters will likely
rise further."
     The Nikkei jumped 2.5 percent to 14,551.45 by
mid-morning trade after hitting 14,566.87, the highest since
early June 2008.
     At the opening bell, the Nikkei 225 May options contracts
settled at 14,601.95, which has now become a new near-term
resistance level, market observers said.
    Exporters took the spotlight in early trade. Toyota Motor
Corp rose 3.5 percent, Honda Motor Co advanced
2.5 percent and Komatsu Ltd gained 4.2 percent.
    The U.S. dollar punched through 100 yen on Thursday, its
highest level against the currency in over four years, helped by
 data showing U.S. claims for unemployment benefits fell to the
lowest level since January 2008.
    The dollar last traded at 100.81 yen.
    The Topix gained 2.2 percent to 1,207.03.
    "Many investors have waited for this moment when the yen
drops to 100 against the dollar. It raises hopes that exporters
will revise up their earnings for the business year," said
Yutaka Miura, senior technical analyst at Mizuho Securities.
     With the earnings season in full swing and companies
reporting strong results for the year ended March 2013, many of
the blue chip companies have surprised investors with overly
conservative forecasts for the current fiscal year. The likes of
Toyota and Sony Corp based their foreign exchange
assumptions at 90 yen to the dollar.
     However, traders were optimistic about the outlook for
corporate Japan.
    "Conservative forecasts did not lead to pessimism in the
market. They rather made us think, 'oh, they can generate such
profits even at 90 yen, then their actual profits will be way
better at the end of the day,'" said Takuya Takahashi, an
analyst at Daiwa Securities.