* Nikkei climbs 3.5 pct on day, up 3.4 pct for week
* Domestic data, weak yen also lift market
* Interest sensitive sectors lead gains
* Nikkei 14,000 in sight next week - fund manager
By Tomo Uetake
TOKYO, June 28 Japan's Nikkei share average rose
3.5 percent to its highest close this month, helped by optimism
that China on that the U.S. Federal Reserve will not soon rein
in its stimulus measures and by encouraging Japanese economic
Modest gains in Asian markets also lifted the mood as the
benchmark Nikkei ended 463.77 points higher at
13,677.32, the highest close since May 31.
The index gained 3.4 percent for the week, extending its
winning streak to two weeks, after a confidence-sapping sell-off
that began last month.
Concerns over China's credit crunch continued to subside
with Beijing's central bank pledging to ensure reasonable
lending growth and stable markets.
"Investors were relived that one of the biggest worries is
receding," said Hiroichi Nishi, an assistant general manager at
SMBC Nikko Securities.
The improved mood in Asian bourses followed Wall Street's
rally as two more U.S. Federal Reserve officials sought to
reassure markets that any tightening of its stimulus drive was
still a distant prospect.
Upbeat domestic data also contributed to Friday's advance.
Japan's core consumer prices were flat in May compared with a
year earlier, marking the first time they have stopped falling
in seven months, government data showed on Friday.
Meanwhile, Japanese industrial output rose 2.0 percent in
May from the previous month, up for the fourth consecutive
month, a sign that a pick-up in exports is underpinning factory
output and the broader economy. The figure was better than a
market consensus of a 0.2 percent increase.
"Investors were cheered by the better data and see that
Abenomics is being effective for the economy," said Takuya
Takahashi, an analyst at Daiwa Securities.
The Topix gained 3.2 percent to 1,133.66, with 3.19
billion shares changing hands. That was the highest in a week
but still below last month's average daily volume of 4.67
The weak yen also buoyed the market, with the yen dropped a
two-and-a-half week trough to the dollar in Asian trade on
Friday, helping exporters attract buyers.
Against the greenback, the yen weakened 0.4 percent
to 98.75 after falling to 99.03 yen earlier, its lowest since
Mazda Motor Corp rose 4.6 percent, while Subaru
maker Fuji Heavy Industries Ltd added 5 percent.
Panasonic Corp jumped 6.7 percent after the company
sold about 60 percent of its holdings in other firms and raised
140 billion yen ($1.4 billion) to repay debt.
MORE UPSIDE IN SIGHT?
Market players said the Nikkei may remain resilient.
Yasuo Sakuma, portfolio manager at Bayview Asset Management,
said that if other variables are constant, the Nikkei could hit
14,000 next week.
He added that a 5 percent jump on Friday in the TSE real
estate investment trust (REIT) index is noteworthy as
it is seen as a bellwether for the market.
While all of Topix's 33 subsectors were in positive
territory, real estate companies and financials led Friday's
The Topix real estate sector sub-index climbed
5.6 percent and banking and securities
sub-indices advanced 4.8 percent and 4.6 percent, respectively.