Nikkei rises to 5-1/2-year high, exporters jump as yen slides

Sun May 12, 2013 9:48pm EDT

* Nikkei may reach 15,000 this week - broker
    * With USD/JPY assumption at 100, forecasts will rise 28 pct
- analyst

    By Ayai Tomisawa
    TOKYO, May 13 (Reuters) - Japan's Nikkei share average
surged to a fresh 5-1/2-year high on Monday as the weakening yen
further bolstered exporters on hopes that they will raise their
forecasts for the current year.
    Strength in Wall Street on Friday also spurred buying after
some rosy earnings buoyed investor sentiment.
    The Nikkei rose 1.4 percent to 14,810.92 in
mid-morning trade after climbing as high as 14,828.14, the
highest level since January 2008.
    "There is increasing demand for Japanese exporters from
foreign investors," said Kyoya Okazawa, head of global equities
at BNP Paribas.
    With the earnings season in full swing and exporters are
reporting overly conservative forecasts for the current year
through March, many investors expect that the companies will
raise their forecasts at some point this fiscal year.
    "Conservative guidance is the same old Japanese managerial
judgment. The market doesn't mind conservative forecasts as they
are pretty sure that the companies will revise up the
already-announced figures," Okazawa said.
    Helped by gains in such exporters as automakers and
electronics, he added that the Nikkei will probably reach 15,000
as soon as this week.
    The Topix gained 1.7 percent to 1,230.82.
    The yen last traded below 102 against the dollar.
    The likes of Panasonic Corp, Toyota Motor Corp
 and Sony Corp based their foreign exchange
assumptions at 90 yen-95 yen to the dollar.
    Of about 1,394 companies reporting their full-year earnings,
they based their dollar-yen assumptions at an average 92 yen and
forecast an average of 21 percent growth in their operating
profits for the year through March 2014, said Tomochika Kitaoka,
strategist at Mizuho Securities.
    "But if the dollar-yen assumption is raised to 100 yen, a
gap between companies' estimates and analysts' figures will be
filled...their operating profits are expected to rise about 28
percent on year," Kitaoka said.
    On Wednesday, exporters led the gains, with Nissan Motor Co
 jumping 5.4 percent, Toyota Motor Corp adding 3.5
percent and Sony Corp gaining 5.1 percent.
    The weakening yen allows Japanese exporters to cash in
overseas profits at more favourable rates.
    Analysts also said the market should stay upbeat after Japan
avoided criticism about recent weakness in the yen at a meeting
of Group of Seven finance officials on Saturday.
    "If international peers criticise the yen's weakness,
investors who are on the nervous side could stop chasing the
market higher. Now, such concerns are receding," said Kenichi
Hirano, a strategist at Tachibana Securities.
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