* Nikkei's weekly gain biggest since Dec 2011
* U.S. data, optimism on BOJ encourage investors
* Yen/dollar falls to 3-1/2-year low
* Fast Retailing up 24 percent for the week
By Ayai Tomisawa
TOKYO, March 8 Japan's Nikkei share average
ended at a new 53-month high on Friday, as exporters and real
estate shares rose helped by bullish U.S. data, a weakening yen,
and ongoing optimism aggressive easing will soon be adopted by
the Bank of Japan's new leadership.
The Nikkei advanced 2.6 percent to 12,283.62, its
highest closing level since September 2008. For the week, the
index gained 5.8 percent, the biggest weekly gain since December
It also sailed past the settlement price of the Nikkei 225
options and futures that expired on Friday morning at 12,072.98.
Stocks were also supported by lower-than-expected jobless
claims data signalling further improvement in U.S. employment,
as well as the weaker yen which hit a 3-1/2-year low of 95.44
yen to the dollar on Friday after strong Chinese export
data boosted risk sentiment.
Exporters were bought on hopes that a weak yen would lift
their competitiveness in the global market and raise their
overseas earnings when repatriated. Honda Motor Co
gained 2.7 percent, Nissan Motor Co advanced 3.0
percent and Toshiba Corp added 3.9 percent.
Fumiyuki Nakanishi, general manager of investment and
research at SMBC Friend Securities, said he believes extensive
program buying is taking place. "When the futures go up, that
pulls up the whole market," he said.
Investors were bullish after the BOJ raised its outlook on
Thursday, noting at the last meeting chaired by governor Masaaki
Shirakawa that Japan's economy was "bottoming out". Successor
Haruhiko Kuroda, who is expected to implement aggressive easing,
takes his place soon.
Real estate shares, which benefit from Prime Minister Shinzo
Abe's reflationary policy, soared with Mitsui Fudosan Co
rising 4.5 percent, Mitsubishi Estate Co
gaining 5.2 percent and Sumitomo Realty & Development Co
adding 4.2 percent.
The broader Topix gained 1.6 percent to 1,020.50.
Trading volume was large mainly due to the settlement of Nikkei
225 options and futures, with 4.84 billion shares changing
hands. Last week's average daily volume was 3.32 billion shares.
Analysts say foreign investors continue to pile into
large-cap exporters as the yen stays soft, while retail
investors are buying smaller domestic-focused companies.
"An appetite for risky assets is rising as global shares
such as U.S. stocks are up, the yen is weak... Investors think
that they might lose if they don't buy Japan stocks now," said
Yoshiyuki Kondo, an analyst at Daiwa Securities.
Buying was also supported after Japan's Financial Services
Agency said on Thursday that it would relax a regulation, called
the uptick rule, to allow stock short selling only at a price
that is higher than the last trade.
"The market welcomes the news on deregulation of short
selling because it would reduce volatility," said Kyoya Okazawa,
head of global equities and commodity derivatives at BNP Paribas
in Tokyo. "I think that's the biggest factor behind today's
strong market sentiment."
FAST RETAILING IS A STAR
Index heavyweight and operator of the Uniqlo clothing stores
Fast Retailing Co Ltd was the most-traded stock on the
main board, contributing 114 positive points to the Nikkei.
Shares of Fast Retailing, which on Monday announced strong
February sales, were 24 percent up on the week.
On Friday, Fast Retailing jumped 9.8 percent. The jump
stemmed from a combination of algorithm buying and margin
trading, a dealer at a Japanese brokerage said.
Friday's notable losers were power utility companies, which
are hurt by a soft yen because they import fuels. The power
utility sector was the worst sectoral performer,
dropping 1.2 percent.
Convenience store operators also took a hit, with FamilyMart
Co Ltd falling 1.7 percent after the Nikkei newspaper
said its operating profit for the year ended Feb. 28 was likely
to come in below its previously projected 45 billion yen, partly
due to a drop in cigarette sales. Peer Lawson Inc
slipped 1.4 percent.