Nikkei rises to fresh 6-month high led by exporters, banks

Wed Jul 30, 2014 9:56pm EDT

* Nikkei rises for a 5th day
    * Foreigners buy banks and exporters - fund manager
    * Nintendo dives after dismal earnings

    By Ayai Tomisawa
    TOKYO, July 31 (Reuters) - Japan's Nikkei share average rose
to a fresh six-month high on Thursday after solid U.S. growth
buoyed sentiment and as the weakening yen lifted exporters,
while Sumitomo Mitsui Financial Group's earnings
boosted the banking sector.  
    Bucking the strength, Nintendo Co dived 6.3 percent
to a seven-week low after the video game maker posted a
worse-than-expected operating loss in the April-June quarter.
 
    The Nikkei rose 0.7 percent to 15,759.66 points in
mid-morning trade, the highest since Jan. 23. The Nikkei has
gained for the five straight sessions.
    Investors took heart after the U.S. economy rebounded more
sharply than expected in the second quarter, with gross domestic
product expanding at a 4.0 percent annualised pace.
    The dollar climbed to a four-month high of 103.15 yen 
after the U.S. Federal Reserve raised its assessment of the U.S.
economy while reiterating it is in no hurry to increase interest
rates. The dollar last traded at 102.80 yen. 
    "Japanese market is benefiting from a few positive factors,"
said Takatoshi Itoshima, chief portfolio manager at Commons
Asset Management. "The yen is weak and earnings are not bad."
    He added that foreigners are particularly buying major banks
and exporters.
    Toyota Motor Corp rose 0.8 percent, Nikon Corp
 added 1.1 percent and Panasonic Corp gained
1.2 percent. A weak yen lifts Japanese exporters' overseas
profits when repatriated as well as their competitiveness
abroad.
    SMFG jumped 2.7 percent despite a 20 percent fall in its
April-June profits, but analysts had priced in the decline in
profits due to the value of stock holdings paled in comparison
with the previous year, when the market rose 57 percent.
 
    Analysts said that the result was positive as the bank is
making a solid progress towards its annual forecast.
    Mizuho Financial Group and Mitsubishi UFJ Financial
Group, which will report earnings after the market
close on Thursday, rose 0.8 percent and 2.2 percent,
respectively.
    The broader Topix gained 0.6 percent to 1,299.38,
while the JPX-Nikkei Index 400 advanced 0.5 percent
to 11,829.10.

 (Editing by Kim Coghill)
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