Nikkei extends rise into 5th day on U.S. deal optimism

Mon Oct 14, 2013 10:09pm EDT

* Exporters higher on weaker yen
    * Fast Retailing strong on brokerage upgrade

    By Ayai Tomisawa
    TOKYO, Oct 15 (Reuters) - Japan's Nikkei share average
extended its rise into a fifth day on Tuesday, tracking gains on
Wall Street after top U.S. lawmakers signalled they could soon
reach a deal to reopen the government and avert a possible debt
default for now.
    The Nikkei was up 0.6 percent at 14,490.92 in
midmorning trade after trading as high as 14,510.37. Resistance
is seen at 14,606.66, a 61.8 percent retracement of its May high
from its June low.
    Japanese markets were closed on Monday for a national
holiday.
    Exporters were in demand as the yen stayed near a two-week
low against the dollar. Sony Corp rose 2.1
percent, Honda Motor Co advanced 0.5 percent and Canon
Inc added 0.5 percent.
    "Although many foreign investors are staying on the
sidelines because of the U.S. concerns, short-term investors are
in favour of exporters which are expected to raise their
full-year forecasts," said a trader at a Japanese brokerage.
    Fuji Heavy Industries Ltd gained 1 percent and was
the seventh most-traded stock by turnover after the Nikkei
business daily said the Subaru maker was expected to report
strong earnings for the April-September period.
    The Nikkei, without citing sources, said the automaker's
operating profit for the six months was seen rising 250 percent
on the year to about 150 billion yen, above the average market
forecast for 142.6 billion yen.
    Fast Retailing Co rose 1.8 percent after CLSA raised
its rating on the Uniqlo operator to "buy" from "sell" and
lifted its target price to 44,500 yen from 27,000 yen, citing
its store expansion plan.
    The broader Topix added 0.4 percent to 1,201.88.
    On Monday, U.S. stocks posted modest gains as investors bet
that there would soon be a deal in Washington to increase the
debt limit. The ceiling needs to be raised by Thursday.
    Senate Majority Leader Harry Reid said that he and his
Republican counterpart, Mitch McConnell, have made strong
progress toward reaching a deal. 
    But investors stayed cautious ahead of the Thursday
deadline.
    "The market is still precarious ... Even if default can be
avoided, investors are not ready to take risk at this point,"
said Takuya Takahashi, an analyst at Daiwa Securities. "They are
cautiously buying back cheap shares."
    The Nikkei is still down 2.1 percent from a 9-1/2-week high
marked on Sept. 27.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article