Nikkei hits 3-week high led by auto shares on yen
(Adds stocks, comment)
By Aiko Hayashi
TOKYO, March 23 (Reuters) - The Nikkei average rose 0.20 percent on Friday to trade at its highest in three weeks as investors picked up exporters such as Honda Motor Co. Ltd. (7267.T) due to a recent softening of the yen.
The Nikkei has now recouped about half the losses it booked three weeks ago when falls in Chinese shares touched off a global equities sell-off.
"Investors are buying technology and auto shares, getting support from the yen," said Kenichi Azuma, equity strategist at Cosmo Securities, noting that those shares had lagged behind domestic-focused stocks in the recent market recovery.
The Nikkei .N225 was up 34.33 points at 17,453.53 by the end of the morning session after climbing as high as 17,534.77, a level last seen on March 1. The broader TOPIX index added 0.38 percent to 1,738.41.
Automakers benefited from the dollar's rise above 118 yen JPY= on the view that Federal Reserve may keep interest rates on hold for some time. Honda Motor rose 1 percent to 4,240 yen, while Suzuki Motor Corp. (7269.T) added 1.9 percent to 3,160 yen.
Industrial robot maker Fanuc Ltd. (6954.T) was up 1 percent to 11,000 yen, while Kyocera Corp. (6971.T) gained 0.6 percent to 11,140 yen.
A weaker yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home.
Mazda Motor Corp. (7261.T) also advanced 0.9 percent to 666 yen after unveiling a new business plan aimed at boosting its operating profit by more than 27 percent in four years through product-led growth and accelerated cost cuts. [ID:nT162277]
Trade was less active with 944 million shares changing hands on the Tokyo bourse's first section, compared with last week's average morning volume of 1.08 billion shares. Declining shares beat advancers by 940 to 639.
GAINS LIMITED
But Toyo Securities senior strategist Katsuhiko Kodama said the Nikkei's advance would likely be limited due to profit-taking and thin trade as the month draws to a close.
"The market is no doubt on the rise, but it is now taking a breather as investors are alarmed it has gone up too rapidly in the previous three sessions," he said. "The market needs more trade volume to go above this level."
Among other gainers, drug maker Eisai Co. Ltd. (4523.T) rose 0.7 percent to 5,840 yen after it said it would buy privately held U.S. biotechnology firm Morphotek Inc. for $325 million, potentially boosting the Japanese firm's lineup of cancer drugs.
Shares of energy firms such as Inpex Holdings Inc. (1605.T) advanced as U.S. crude futures CLc1 rally towards $62, close to the high for 2007, boosted by concern about tight gasoline supplies ahead of the U.S. summer driving season.
Petroleum refiner AOC Holdings Inc. (5017.T) was up 2.1 percent to 1,870 yen. Nippon Oil Corp. (5001.T), Japan's largest oil distributor, added 0.1 percent to 938 yen. Inpex was up 1 percent at 948,000 yen.
Among losers, Elpida Memory Inc. (6665.T) lost 3.3 percent to 4,710 yen after electronics firm NEC Corp. said on Thursday it sold 2.3 percent of its stake in the chip maker, reducing its shareholdings to 6 percent. [ID:nT143907]
