Nikkei rises to two-week high on easing Fed concern, better econ data

Thu Jun 27, 2013 9:16pm EDT

* Nikkei trades above 13,500 for first time since June 11
    * Strong industrial production data, CPI help mood
    * Exporters gain as dollar stays above 98 yen
    * All sectors in positive territory

    By Ayai Tomisawa
    TOKYO, June 28 (Reuters) - Japan's Nikkei share average rose
to a two-week high on Friday, helped by optimism that the
Federal Reserve will not rapidly rein in its stimulus measures
and by encouraging
domestic economic data.
    The Nikkei rose 2.3 percent to 13,516.43 points by
midmorning trade, its highest since June 11.
    Japan's core consumer prices were flat in May compared with
a year earlier, marking the first time they have stopped falling
in seven months, government data showed on Friday.
    Meanwhile, Japanese industrial output rose 2.0 percent in
May from the previous month, up for the fourth consecutive
month, a sign that a pick-up in exports is underpinning factory
output and the broader economy. The figure was better than a
market consensus of a 0.2 percent increase.
    "Investors are cheered by the better data and see that
Abenomics is being effective for the economy," said Takuya
Takahashi, an analyst at Daiwa Securities.
    The Topix gained 2.3 percent to 1,123.91.
    The weak yen is also helping the mood, and exporters
attracted buyers as the dollar is comfortably trading above 98
yen. Toyota Motor Corp gained 1.5 percent, Sony Corp
 added 1.7 percent, and Nikon Corp advanced 1.4
percent.
    The benchmark Nikkei has dropped 15 percent since reaching a
5-1/2-year high on May 23, hurt by slowing growth in China,
fears of a pullback in U.S. stimulus and disappointment over the
Japanese government's recently announced growth strategy. 
    However, it is still up about 30 percent this year on the
back of Prime Minister Shinzo Abe's expansionary policy, weaker
yen as well as the Bank Of Japan's sweeping monetary easing.
    Market players said that the Nikkei may be resilient as
overseas headwinds such as worries about the U.S. Fed's plan to
trim its stimulus and fears for the stability of the Chinese
banking system are easing. But they added that volume may stay
subdued in the absence of firm catalysts.
    "Buying may be contained in short-covering," said Mitsushige
Akino, chief fund manager at Ichiyoshi Asset Management. "The
market wants to see April-June results, and investors want to
see the results of the upper house election to trade
proactively."
    On Thursday, U.S. stocks rose after three Fed policymakers
sought to downplay the notion that the central bank would bring
an imminent end to its bond-buying programme.
    All of Topix's 33 subsectors were in positive territory.