TOKYO, Jan 7 Japan's Nikkei share average is set
to test a 23-month high on Monday, helped by encouraging U.S.
economic data, while a weakening yen will likely buoy exporters
and bank shares could gain from a rule change.
The Nikkei was likely to trade between 10,700 and 10,850 on
Monday, strategists said, after jumping 2.8 percent at 10,688.11
on Friday, its highest close since March 4, 2011. If the index
touches the 10,800-mark, it will be the first time since Feb.
Foreign brokers put in net buy orders of 11.3 million
shares, the largest net purchase since Dec. 17.
"Japanese shares will likely continue attracting buying as
the conditions are good for them," said Hiroichi Nishi, general
manager at SMBC Nikko Securities, adding that some investors see
believe exporters' earnings will be better than expected.
On Friday, the dollar climbed to a nearly 2-1/2 year peak
against the yen after the Federal Reserve flagged concerns about
the risks of its stimulative monetary policy.
The dollar rose as high as 88.40 yen, according to
Reuters data, the highest since July 2010. A weak yen lifts
exporters' overseas earnings when repatriated.
The Japanese banking sector will benefit after global
regulators gave banks more time to build up cash buffers,
allowing them to divert some of their reserves to helping
struggling economies grow.
"Japanese banks are on track to meet the requirements and
they are working towards them anyway, so it is unlikely that the
news will affect them largely, but sentiment should be
positive," said Norihiro Fujito, a senior investment strategist
at Mitsubishi UFJ Morgan Stanley Securities.
"Since the market has stayed strong and volume is rising,
the climate is positive for banking shares anyway."
Nikkei futures in Chicago closed at 10,760, up 0.7
percent from the close in Osaka of 10,680.
> S&P 500 finishes at 5-year high on economic data
> Dollar scales nearly 2-1/2 year peak vs yen; euro up
> US yields hover near 8-month high on Fed policy fears
> Gold drops but pares losses after U.S. payrolls
> Brent crude falls, demand concerns offset US jobs data
STOCKS TO WATCH
--Fast Retailing Co Ltd
Fast Retailing said on Friday that same-store sales at its
Uniqlo clothing chain in Japan rose 4.5 percent in December from
a year earlier, up for the second straight month, due to solid
sales of winter clothing.
--Mazda Motor Corp
Mazda said on Friday it sold 17,273 cars in China in
December, down 26.4 percent from a year earlier, as Chinese
consumers continue to shun Japanese cars amid a lingering
territorial row between the two Asian neighbors.