Nikkei rises to 5-1/2-year high as exporters and brokers surge

Sun May 12, 2013 11:27pm EDT

* Nikkei may reach 15,000 this week - broker
    * Exporters, brokers lead the gains
    * 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, while brokerage shares attracted
buyers as growing volume was  expected to bring in more fee
income.
    Strength in Wall Street on Friday also spurred buying after
some upbeat earnings buoyed investor sentiment.
    The Nikkei rose 1.6 percent to 14,833.30 by the
midday break after climbing as high as 14,847.20, the highest
level since January 2008.
    The index has added nearly 43 percent this year, helped by
Prime Minister Shinzo Abe's growth policies and the Bank Of
Japan's aggressive monetary easing.
    "There is increasing demand for Japanese exporters from
foreign investors," said Kyoya Okazawa, head of global equities
at BNP Paribas in Tokyo.
    The earnings season is in full swing. Market participants
say some exporters are reporting overly conservative forecasts
for the current year through March, and many investors expect 
these companies to raise their earnings guidance 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.
    He added that the Nikkei will probably reach 15,000 as soon
as this week, helped by gains in exporters as such automakers
and electronics
    Exporters soared on Monday, with Nissan Motor Co 
jumping 5.5 percent, Toyota Motor Corp adding 4.1
percent and Sony Corp gaining 4.9 percent.
    The securities subsector, which soared 9.0 
percent, was the best sectoral performer on hopes of an increase
in commission fees from the booming market. Nomura Holdings
 jumped 11 percent while Daiwa Securities 
surged 8.7 percent. 
    The Topix gained 2.0 percent to 1,234.72.
    The yen last traded at 101.86 against the dollar.
    The likes of Panasonic Corp, Toyota Motor Corp
 and Sony Corp based their foreign exchange
assumptions at 90 yen to 95 yen to the dollar.
    Among 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.
    The weakening yen enables Japanese exporters to earn more
from foreign currency profits.
    Panasonic Corp soared 9 percent after the company
said its operating profit will rise 55.3 percent in the year to
March as it steps back from struggling operations in TVs and
other consumer products. 
     Analysts 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.