Nikkei hits 3-1/2 week high on Fed hopes; Softbank extends sharp rally

Tue Oct 22, 2013 9:56pm EDT

* Dollar's weakness versus yen limits broader market gains
    * Nidec rises on strong profit forecast
    * Softbank hits new 13-year high on efforts to bolster
growth - analyst

    By Ayai Tomisawa
    TOKYO, Oct 23 (Reuters) - Japan's Nikkei share average edged
up to a 3-1/2 week high on Wednesday morning after a soft U.S.
jobs report cemented expectations the Federal Reserve will keep
its stimulus in place until early next year.
     The Nikkei gained 0.3 percent to 14,753.47 in mid-morning
trade after rising as high as 14,799.28, the highest since Sept
27. The Topix added 0.3 percent to 1,217.62.
    Softbank Corp extended its recent gains, jumping 
3.0 percent to a new 13-year high of 7,850 yen and was the most
traded stock by turnover.
    "The stock has been popular these days..investors are taking
heart in its aggressive efforts to bolster growth," said an
analyst at a Japanese brokerage house.
    Softbank, which has gained 150 percent so far this year,
last week said it had agreed to pay $1.26 billion for a 57
percent stake in privately held cellphone distributor Brightstar
Corp as it looks to boost its bargaining power with handset
makers. 
    The broader market took its lead from a strong session on
Wall Street after data showed U.S. employers added 148,000
workers last month, well below the 180,000 economists had
expected. 
    The data was seen as supporting the Fed's decision to
maintain its $85 billion in monthly bond purchases, which has
been a major factor in the S&P 500's 2013 rally of 23 percent.
 
    But the dollar remained under pressure at 98.14 yen,
preventing investors from aggressively chasing the market
higher. 
    Bellwether exporters were mixed, with Toyota Motor Corp
 rising 0.2 percent, Honda Motor Co falling 0.6
percent and Sony Corp dropping 0.4 percent.
    "It's hard to chase exporters higher now because the dollar
is under pressure," said Tsuyoshi Nomaguchi, a strategist at
Daiwa Securities. "But with the second-quarter earnings season
just around the corner, some of them will gain ground on likely
higher profit forecasts this fiscal year."
    A stronger yen dents Japanese exporters' competitiveness
overseas and reduces their dollar earnings when repatriated.
    Fuji Heavy Industries Ltd gained as much as 1.8
percent after the Nikkei reported that the company plans to
double the production capacity of Subaru cars in the United
States to cater to growing demand for the sport utility vehicle
there. 
    Nidec Corp rose 3.8 percent to 9,090 yen after
saying that its operating profit for the year ending March 2014
will likely jump 355 percent on year to 80 billion yen, up from
previously forecast 75 billion yen thanks to solid sales of
automobile parts.
    But CLSA said its stock price is expensive as it is trading
over 20 times its estimated earnings and over 2.5 times its book
value. The brokerage has a 'Sell' rating on the stock.
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After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.