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Nikkei gains for 3rd straight week; investors bet on further BOJ easing
March 1, 2013 / 7:35 AM / 5 years ago

Nikkei gains for 3rd straight week; investors bet on further BOJ easing

* Nikkei rises 0.4 pct for day, up 1.9 pct for week
    * Real estate stocks and other reflation bets support Topix
    * Further gains in Nikkei expected towards April - analysts

    By Tomo Uetake
    TOKYO, March 1 (Reuters) - Japan's Nikkei stock average
edged higher on Friday, led by demand for real estate stocks as
investors bet on the new Bank of Japan chief pursuing aggressive
monetary easing to pull the world's third-largest economy out of
deflation. 
    The Nikkei closed up 0.4 percent at 11,606.38, led
by gains in domestic demand-related plays, after dropping as
much as 0.8 percent in the morning. For the week, the benchmark
advanced 1.9 percent, the third straight weekly gain.        
    On Thursday, it rose 2.7 percent, marking the biggest one
day percentage rise in three weeks, partly due to end-of-month
window-dressing, traders said.
    "The Nikkei extended gains today despite lingering concerns
over the political situation in Italy and the U.S. government's
spending cuts," said Yuya Tsuchiya, a strategist at Toyo
Securities.
    "Expectations for aggressive easing by the Bank of Japan
under (Haruhiko) Kuroda have remained high."
    Prime Minister Shinzo Abe's ambition to use the full force
of monetary policy to end deflation and spur growth has sharply
weakened the yen and sent Tokyo stocks soaring since
mid-November, with the Nikkei hitting a 4-1/2 year high on
Monday.
    Abe nominated Asian Development Bank President Kuroda, an
advocate of aggressive policy action, to head the BOJ,
bolstering  market confidence in the reflation strategy. 
    "Investors are hoping that Abe's government will tackle
asset deflation, so stocks related to the value of land such as
real estate, railroad and warehouse shares have been popular
recently," said Hajime Nakajima, deputy general manager at Iwai
Cosmo Securities.
    The real estate subindex jumped 5.1 percent and
was the best sectoral performer, with Mitsubishi Estate 
climbing 6.1 percent and Mitsui Fudosan rising 3.2
percent.
    Nomura Real Estate Holdings surged 7.9 percent
after Nomura Holdings Inc said it would cut its stake
in the Nomura Real Estate in a deal that will raise about $577
million as Japan's largest brokerage prepares for tougher
capital regulations. 
    
    CHINA PLAYS DROP ON SOFT PMI
    Selling in exporters, which have been the biggest gainers
since the yen began declining sharply, capped the Nikkei's
upside. Nikon Corp fell 0.8 percent and Toyota Motor
Corp dropped 0.3 percent. 
    Although China's weak manufacturing data had a limited
impact on the overall Japanese market, exporters with high
exposure to the Chinese market were hit. Hitachi Construction
Machinery Co Ltd fell 2.1 percent while Komatsu Ltd
 dropped 0.6 percent. 
    Data showed Chinese factory activity grew at its slowest
pace in four months in February as domestic demand softened.
 
    The broader Topix index, which gives less weight to
tech stocks and exporters, outperformed, up  0.9 percent to
984.33, with 2.91 billion shares changing hands, compared with
last week's average daily volume of 2.93 billion shares.
    After advancing more than 10 percent this year, the Nikkei
suffered a correction early this week as the yen's downturn
stalled amid uncertainty over the Italian election, spurring
worries about a hung parliament and the possibility it could
reignite debt problems in Europe.
    But analysts said the fallout was likely temporary.
    Kenichi Hirano, a strategist at Tachibana Securities, said
the Nikkei's long-term sentiment is supported by ongoing hopes
for monetary easing. 
    "The Nikkei will likely add gains towards April as investors
expect the central bank will announce easing measures at its
policy meeting then," he said.
    The Nikkei call option trades were much more active at
12,000, compared to other levels, and that suggests the market
participants were seeing more upside for the benchmark in the
near term, Toyo's Tsuchiya said.

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