Nikkei scales 6-mth high as foreign buying, pension fund plan buoy mood
* Weekly foreign buying largest since April * GPIF's overhaul buoys risk appetite - trader * Weaker yen lifts exporters By Ayai Tomisawa TOKYO, Nov 21 (Reuters) - Japan's Nikkei share average soared 2.0 percent to six-month highs on Thursday morning, spurred by a jump in foreign buying and plans by a major government fund to invest more of its $2 trillion funds in riskier assets. The Nikkei added 294.10 points to 15,370.18 in mid-morning trade, also helped by a weaker yen spurring exporters higher. The index rose as high as 15,377.00 earlier, the best mark since May 23. The Topix gained 0.9 percent to 1,244.68. Foreign investors' weekly net buying of Japanese equities jumped to 1.295 trillion yen ($13 billion) last week, the biggest amount in seven months, data from the Ministry of Finance showed. In the previous two weeks, they bought 522.4 billion yen in Japanese equities. "We saw a big rally last week, but the figure surprised the market as it exceeded 1 trillion yen," said Hikaru Sato, a senior technical analyst at Daiwa Securities. Last week, the Nikkei jumped 7.7 percent as strong earnings, led by financials, and a weaker yen as well as dovish remarks from incoming Fed Chief Janet Yellen boosted risk appetite. Exporters raced ahead with the dollar staying comfortably above 100 yen as minutes from the Fed's Oct. 29-30 meeting showed officials felt they might be able to start scaling back the bank's stimulus program at one of its next few meetings. Honda Motor Co rose 2.6 percent, Sony Corp gained 1.4 percent and Nikon Corp climbed 2.9 percent. Also lifting the mood was news the Government Pension Investment Fund (GPIF), the world's biggest pension fund, is planning to plough more of its $2 trillion in public funds in stocks and other riskier assets. It would mark the most ambitious overhaul since its creation more than a decade ago. "We think the (GPIF) proposals are long on what is really needed to sustain a structural bull market: qualitative focus on better returns," said Jesper Koll, director of equities research at JP Morgan. Another trader at a Japanese brokerage said: "There are also expectations that the GPIF will look into stocks in the new JPX-Nikkei Index 400, and such hopes are lifting these small stocks as well." The new index, which will showcase companies with high return on equity and robust corporate governance, will start operation next year and include fast-growing companies and small-cap stocks. E-commerce giant Rakuten Inc has risen around 10 percent since the ROE index was announced last week and Seria Co Ltd, operator of a 100 yen-shop chain, has jumped 12 percent, outpacing the 7.1 percent rise in the Nikkei over the same period. Rakuten gained 1.0 percent while Seria soared 2.6 percent.
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