Nikkei set to scale fresh 5 1/2-yr highs on weak yen, upbeat U.S. data
TOKYO, May 20 (Reuters) - The Nikkei share average is set to extend its record-breaking run on Monday, as further weakness in the yen and signs of an improving U.S. economic outlook bolsters prospects for higher Japanese corporate earnings in the current business year. Wall Street's record closing highs on Friday is also expected to underpin the market, likely pushing it to a fresh 5-1/2 year peak. Market players said the Nikkei was likely to trade between 15,150 to 15,400 on Monday after rising 0.7 percent to 15,138.12 on Friday. During trade, the index rose as high as 15,157.32, the highest since December 2007. Nikkei futures in Chicago closed at 15,350, up 1.1 percent from the close in Osaka of 15,190. Analysts expects exporters to attract buying after the dollar broke above the 103-yen level on Friday buoyed by strong U.S. consumer sentiment data. The Dow and the S&P 500 finished at fresh record highs on Friday. Data showed Americans felt better about their economic and financial prospects in early May, with consumer sentiment at its highest in nearly six years, while a gauge of future economic activity rose in April to a near five-year high. "Strength in the U.S. market and signs of a recovery in the U.S. economy are serving as a tailwind to the Nikkei's further gains. It's promising that the yen is staying below 100 yen to the dollar," said Yutaka Miura, a senior technical analyst at Mizuho Securities. He expects the Nikkei to stay comfortably above the 15,000-mark over the medium term. Analysts said that investors are increasingly becoming upbeat about the prospects for higher corporate earnings for the fiscal year through March, as the weakening yen has improved the outlook for many exporters. They expect an average operating profit rise of 30 percent, compared with the companies' conservative forecasts of around a 20 percent increase in their operating profits. Many exporters have used assumptions of around 90-95 yen to the dollar. The dollar last traded at 102.83 yen, taking a breather from its recent sharp rally, but still not far off a 4 1/2 year high of 103.32 tapped on Friday. > Dow, S&P end at records, stocks mark 4th week of gains > Dollar tops 103 yen, a 4-1/2-year high, on robust U.S. data > Prices fall on improved consumer sentiment > Gold hits 1-month low as Fed pressured to end stimulus > Oil rallies for third day, shrugging off firm dollar STOCKS TO WATCH --Toyota Motor Corp Toyota is planning to increase production of lithium-ion batteries by six times, as the automaker prepares to eventually use them in its flagship Prius gasoline-electric hybrid cars, the Nikkei business daily reported on Sunday. --Panasonic Corp Sanyo Electric Co may cease to exist under a reorganization by Panasonic that includes global jobs cuts, Nikkei reported. --Sony Corp Sony plans to appoint Chugai Pharmaceutical Co Chief Executive Osamu Nagayama as chairman, the Nikkei reported. --Yahoo Japan Corp Yahoo Japan said late on Friday it suspected that up to 22 million of its user IDs may have been "leaked" and it detected an unauthorized attempt to access the administrative system of its web portal Yahoo Japan, the Kyodo news agency reported. --Mori Seiki Mori Seiki plans to take "sole control" of its German partner Gildemeister, according to a regulatory filing published on the Austrian competition authority's website on Friday.
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