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Nikkei climbs 1.9 pct to new 5-1/2-year high, Fast Retailing stars
May 23, 2013 / 1:35 AM / 4 years ago

Nikkei climbs 1.9 pct to new 5-1/2-year high, Fast Retailing stars

* Bernanke remarks sees yen at 103 to dollar, aids exporters
    * Nikkei heads for fifth straight day of gain
    * Fast Retailing jumps as retail investors in hot pursuit

    By Dominic Lau
    TOKYO, May 23 (Reuters) - Japan's Nikkei average soared 1.9
percent to a 5-1/2-year high on Thursday, aided by exporters as
the yen weakened against the dollar after the U.S. Federal
Reserve chief suggested the central bank could scale back
stimulus in coming months.   
    The Nikkei <.included Honda Motor Co, Canon Inc
, TDK N225> was up 303.11 points to 15,930.37 after
trading as high as 15,942.60, its best mark since December 2007.
The index was heading for a fifth straight day of gain.
    "The focus today is that the yen pushed to 103 last night on
the back of comments out of the U.S.," said Stefan Worrall,
director of equity cash sales at Credit Suisse in Tokyo.
    "It's going to be a huge fillip for the market. Any
weakening of the yen would be. Also, it's evident of the
strength of retail investors and their optimism." 
    Bernanke told Congress that a decision to taper the $85
billion in bonds the Fed is buying each month could come at one
of the central bank's "next few meetings" if the economy looked
set to maintain momentum. 
    His comments lifted the dollar to a fresh 4-1/2-year high of
103.74 yen on Wednesday. The Japanese currency was last traded
at 103.48 on Thursday.
    Exporters on the rise Corp and Ricoh Ltd,
up between 2.9 and 6 percent. 
    But Mitsubishi Motors Corp lost 6.7 percent after
sources said the automaker is considering wiping out about 920
billion yen in accumulated loses by reducing capital stock by an
equivalent amount. 
    Such a move is a common step for Japanese firms with a
history of deep losses that have returned to profitability and
want to begin paying dividends.
    The broader Topix added 0.9 percent to 1,287.26.
    Index heavyweight Fast Retailing Co Ltd jumped 5.1
percent, extending a 7.4 percent surge in the previous session
as retail investors were in hot pursuit of the operator of
casual fashion chain Uniqlo. It was the top-weighted gainer in
the Nikkei.
    "Retail investors are very active in this market. They are
using Fast Retailing as a home camp," a Tokyo-based trader said.
"It's an indicator of the extent of the retail investors'
involvement in this market."
    Interest from foreign investors was also high, with
government data showing they bought 716 billion yen ($6.9
billion) worth of Japanese equities last week. They have
ploughed a total of 8.28 trillion yen into Japanese stocks since
the end of 2012.
    The benchmark Nikkei is up 14.8 percent so far this month,
on track for a 10th straight monthly gain - its longest such
winning streak since 1972. 
    The index has rallied 53 percent this year, supported by
aggressive government and central bank policies to revive
growth, and it has risen 12 percent since May 9, when the dollar
broke above the 100-yen mark.
    "We cannot rule out the chance of the Nikkei climbing to the
18,000 level if the dollar/yen continues to test 110 or 120
(yen). However, investors may consider taking profit as the
rally is substantially running ahead of the fundamentals," BNP
Paribas wrote in a note.
    It recommended investors buy Nikkei December call spread in
case the index moves higher.

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