Nikkei hits fresh 5 1/2-yr high, exporters up on weak yen, upbeat U.S. data
* Nikkei hits highest since Dec 2007 * Exporters lead gains * Report of Japan-India resuming talks on nuclear co-operation pact buoys By Ayai Tomisawa TOKYO, May 20 (Reuters) - The Nikkei share average surged to a fresh 5-1/2 year high on Monday morning, as further weakness in the yen and signs of an improving U.S. economy bolstered prospects for higher Japanese corporate earnings in the current business year. In mid-morning trade, the Nikkei rose 1.1 percent to 15,298.92 after rising as high as 15,312.87, the highest since December 2007. Exporters led the charge, with Toyota Motor Corp rising 1.9 percent, Sony Corp jumping 5.5 percent and Komatsu Ltd advancing 2.2 percent after the dollar broke above the 103-yen level on Friday buoyed by strong U.S. consumer sentiment data. Adding to the positive mood was a Nikkei report that Japan and India are expected to agree at their summit meeting this month to resume talks toward a civilian nuclear cooperation pact. Manufacturers of nuclear reactors benefited on the report, with Toshiba Corp up 2.5 percent, Mitsubishi Heavy Industries 3.9 percent higher and Hitachi Ltd rising 4.2 percent. The broader Topix added 1.2 percent to 1,268.80. "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. Upbeat data from the United States, Japan's major export market, has also helped to underpin the Nikkie in recent sessions. The Dow and the S&P 500 finished at fresh record highs on Friday after 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. Analysts said that investors are increasingly becoming upbeat about the prospects for higher Japanese 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 from the previous year, compared with the companies' conservative forecasts of 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.
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