* Nikkei rises 2.9 pct, biggest daily gain in 22 months
* Credit Suisse upgrades Japan on short-term
* Sony surges on New York building sale
By Sophie Knight
TOKYO, Jan 18 Japan's Nikkei share average
surged 2.9 percent to complete 10 straight weeks of gains, its
longest winning streak since 1987, as heightened expectations of
central bank easing early next week put further downward
pressure on the yen.
The Nikkei advanced 303.66 points on Friday as it
produced its biggest one-day percentage gain in 22 months.
Friday's advance allowed the Nikkei to have a 1 percent gain
for the week.
Exporters led the pack, with Toyota Motor Corp
adding 2.1 percent, Honda Motor Co up 3.2 percent and
Panasonic Corp climbing 5.3 percent. A weaker yen means
their overseas revenue will be higher once repatriated.
The Japanese currency stooped to a fresh 2-1/2 year low of
90.2 yen to the dollar on Friday after an economic adviser to
Prime Minister Shinzo Abe, Koichi Hamada, told a press
conference a weakening of the yen to 95 to 100 yen was nothing
to worry about.
The Bank of Japan and the government have agreed to set 2
percent inflation as the central bank's policy target in a joint
statement likely be issued next week, although no clear
timeframe has been fixed to meet the goal, a deputy economics
minister said on Friday.
"Abe has been successful in lifting investor sentiment. A
good result has to be delivered, and we still don't know whether
it will be, but the fact that he boosted investors' risk
appetites is very positive," said Tetsuro Ii, the chief
executive of Commons Asset Management.
The Nikkei has sprinted up 25 percent in the two months
since then-incoming leader Shinzo Abe began calling for further
policy easing, causing the yen to weaken.
"Foreign investors are becoming increasingly eager to add
more Japanese stocks," said Ii.
A trader at an European brokerage said investors are buying
call options at a strike price of 11,000, or 0.8 percent above
the Nikkei's current level.
Credit Suisse was the latest to upgrade Japanese equities,
bumping them up to 5 percent overweight on a short-term basis,
with a year-end Nikkei target of 12,000.
"Fiscal and monetary policy are increasingly proactive: the
BoJ's balance sheet is set to expand in 2013 by more than those
of other central banks, even before the potential change in the
BoJ inflation target," Credit Suisse analysts wrote in a report,
adding that the BOJ has a track record of unconventional
purchases of REITs and exchange traded funds.
However, the brokerage added, "On a 1- to 5-year view, we
are more cautious due to poor demographics, weak corporate
governance and a primary budget deficit of 9 percent of GDP."
Some market participants are sceptical that the Nikkei's
gains will last beyond the BOJ's meeting on Jan. 21-22, saying
that the inflation target has already been priced in.
"I think it's pretty much peaked out. Volume has been
superb, but I think it will take some time to digest these
gains, and people should be merely cautiously optimistic," said
Yasuo Sakuma, portfolio manager at Bayview Asset Management.
Sakuma said the Nikkei was likely to enter a correction
phase next week as a 2-percent inflation target is already
priced in. The benchmark headed into "overbought" territory
again on Friday, signalled by a breach of the 70-mark on its
14-day relative strength index.
The Topix added 2.4 percent to 911.44, its highest
since March 11, 2011 when a massive earthquake and tsunami hit
Japan. Trade was active, with 3.86 billion shares changing
CASH FOR SONY
Sony Corp was in focus, jumping 12.2 percent to a
six-month high after it announced its U.S. subsidiary would sell
its New York headquarters building for $1.1 billion, expanding
its operating income by an expected $684 million.
It was also the most-traded stock on the mainboard by
Nikon Corp put on 5.1 percent, almost regaining the
nearly 4-1/2 year high it hit on Tuesday, after U.S. chipmaker
Intel Corp - with whom it is developing a new chip
stepper - beat analysts' estimates with its capital spending
forecast for 2013.
Laggards of the day included All Nippon Airways Co Ltd
and Japan Airlines Co Ltd, after they were hit
by a double blow of safety issues with the new Boeing 787
Dreamliner and rising oil prices due to the Algerian hostage