Nikkei rises to 3-week high as Fed minutes hurt yen, buoy exporters

Wed Aug 20, 2014 10:06pm EDT

* Weaker yen a tailwind to exporters - traders
    * Eyes on Jackson Hole - fund manager
    * Hardware equipment makers outperform on Goldman's rating
hikes

    By Ayai Tomisawa
    TOKYO, Aug 21 (Reuters) - Japanese stocks rose to a
three-week high on Thursday morning, clocking gains for the
ninth consecutive day, as the weaker yen shored up exporters
after minutes of the U.S. Federal Reserve's July meeting raised
the risk of an earlier rate hike.
    The Nikkei share average climbed 1.0 percent to
15,601.99 in midmorning trade, the highest level since August 1.
The nine-day winning streak was the longest since December.
    The Fed minutes revealed a more active debate about whether
an earlier hike in rates might be needed. Still, market
participants also seemed reassured that the vast majority of the
Fed's voting committee wanted to keep a pledge that rates would
stay near zero for a considerable time after it stops buying
assets, which is expected in October. 
    Traders said that Japanese companies base their assumptions
on foreign exchange rates at around 101 yen, and therefore the
current level is a tailwind for export manufacturers as the
weaker yen lifts their competitiveness abroad as well as their
profits when repatriated.
    The greenback rose to its highest in over four months
against the yen to 103.85, not far from the April peak of
104.13.
    "People are excited about the yen's level, and optimism is
rising as the next focused event, Jackson Hole, is nearing,"
said Takatoshi Itoshima, a chief portfolio manager at Commons
Asset Management.
    Itoshima was referring to the annual meeting of top central
bankers in Jackson Hole, Wyoming, which will be held from
Thursday through Saturday. 
    Exporters soared, with Honda Motor Co gaining 2.7
percent, Fuji Heavy Industries up 2.5 percent and Nikon
Corp jumping 3.9 percent.
    Hardware precision equipment makers also outperformed after
Goldman Sachs raised their ratings. Konica Minolta 
jumped 3.2 percent after it added the stock to its "conviction
buy" list, citing stronger earnings. Hoya Corp added
2.1 percent after its rating was raised to "buy" from "neutral"
on stable growth.
    The broader Topix added 0.9 percent, and the new
JPX-Nikkei Index 400 gained 0.9 percent to
11,754.52.

 (Editing by Shri Navaratnam)
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