Nikkei hits 7-week high, strong global data continues to support

Mon May 26, 2014 10:05pm EDT

* China PMI, U.S. housing data continue to lift mood
    * Fuji Heavy gains report to beat midterm earnings f'cast
    * Unitika tumbles after requesting capital infusion

    By Ayai Tomisawa
    TOKYO, May 27 (Reuters) - Japan's Nikkei share average
climbed to a fresh seven-week high on Tuesday, extending gains
into a fourth day as recent upbeat Chinese and U.S. data
continued to lift investors' risk appetite.
    The Nikkei was up 0.8 percent at 14,724.84 in
midmorning trade after touching 14,732.68, its highest since
April 8. It rose 1 percent to 14,602.52 on Monday.
    Index heavyweights surged, with SoftBank Corp 
rising 1.7 percent and Fanuc Corp gaining 1.2 percent.
    Fuji Heavy Industries Ltd, the maker of Subaru
cars, jumped 2 percent after the Nikkei business daily reported
that the company expects to beat its own medium-term earnings
projection. 
    "Short covering has been continuing since last week's strong
China PMI data and U.S. housing data," said Norihiro Fujito,
senior investment strategist at Mitsubishi UFJ Morgan Stanley
Securities. "The main buyers are short-term investors like
derivatives players and hedge funds."
    Trading volume was expected to be subdued due to the absence
of major players as financial markets were closed in the United
States for a national holiday on Monday.
    Exporters were strong as the yen stayed near a 1-1/2-week
low of 102.05 to the dollar set on Monday. Honda Motor Co
 rose 1 percent, Sony Corp added 1.1 percent
and Panasonic Corp gained 0.9 percent.
    But Unitika Ltd tumbled 28 percent to 41 yen, its
lowest since December 2012, after the textile maker requested
capital infusions from partner banks on Monday.
    Unitika will issue new shares to raise a total of 37.5
billion yen ($364 million) from three banks - Bank of
Tokyo-Mitsubishi UFJ, Mizuho Bank and Mitsubishi UFJ Trust and
Banking - as well as from Japan Industrial Solutions, an
investment fund supported in part by the Development Bank of
Japan.
    The broader Topix gained 0.7 percent to 1,202.64,
while the new JPX-Nikkei Index 400 added 0.7 percent
to 10,971.03.

 (Editing by Chris Gallagher)
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