Nikkei rises to 5-month highs, exporters gain on strong U.S. data

Tue Jul 1, 2014 10:11pm EDT

* Japan shares valuations attractive - traders
    * Consumer finance stocks soar on hopes for deregulation

    By Ayai Tomisawa
    TOKYO, July 2 (Reuters) - Tokyo's Nikkei share average rose
to a five-month peak on Wednesday morning after Wall Street
scored record-closing highs thanks to strong manufacturing
activity in the U.S., Japan's biggest export market.
    Exporters were stronger after the dollar edged up to 101.54
yen from Tuesday's low of 101.29 yen. 
    The Nikkei rose 0.5 percent to 15,400.79 in
mid-morning trade after hitting as high as 15,444.63 earlier,
the best level since January 24.
    The Dow and S&P 500 both surged to record closing highs,
underpinned in part after financial data firm Markit said its
final U.S. Manufacturing Purchasing Managers Index rose to 57.3
in June, the highest since May 2010. 
    "The market feels confident after the strong U.S. economic
data," said Masashi Oda, chief investment officer at Sumitomo
Mitsui Trust Bank, adding that Japanese shares are likely to
continue rising in the next few months as their valuations are
attractive.
    Oda said that optimism about the health of the global
economy also bolstered sentiment, with investors lapping up
positive data from Asia including Tuesday's China purchasing
managers' index for June and strong manufacturing in Japan.
    "People are now focused on April-June earnings. If the
results are strong, they are likely to chase the marker higher
on top of cheap valuations of Japanese shares," he said.
    Japanese shares are trading at 14 times their earnings 12
months from now compared to U.S. shares at 15.5 times and
European shares at 14.1, according to data provided by Nomura
Securities.
    Exporters attracted strong interest. Toyota Motor Corp
 gained 0.6 percent, Nissan Motor Co advanced
1.0 percent and Sony Corp added 1.1 percent.
    Consumer finance shares soared on hopes that the government
may ease up on rules in order to help small businesses access
the cash they need. 
    Aiful Corp jumped 10 percent to a 14-month high of
700 yen and was the most traded stock by turnover, while Acom Co
 soared 6.8 percent.
    The broader Topix gained 0.5 percent to 1,282.56,
and the JPX-Nikkei Index 400 added 0.5 percent to
11,653.68.

 (Editing by Shri Navaratnam)
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