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Nikkei holds near 6-year high as U.S. data bolsters optimism
December 25, 2013 / 2:25 AM / 4 years ago

Nikkei holds near 6-year high as U.S. data bolsters optimism

* Upbeat U.S. manufacturing data boosts sentiment
    * Retail investor buybacks expected after tax-related sales
    * Buying a bit speculative, broader market softer

    By Hideyuki Sano
    TOKYO, Dec 25 (Reuters) - Japan's Nikkei share average rose
on Wednesday, clinging near a  six-year peak hit the previous
day, supported by optimism towards the global economy and hopes
for fresh buying by Japanese retail investors due to upcoming
tax changes.
    The Nikkei was up 0.2 percent at 15,922.33 in
morning trade, near the six-year intraday high of 16,029.65 hit
on Tuesday, after stronger-than-expected U.S. manufacturing data
helped Wall Street shares finish at record highs.
    U.S. durable goods orders for November surged on rising
demand for goods across a spectrum of industries, pointing to
strength in the economy. 
    "Trading volume is below average because of winter holidays
but we don't really have negative factors at the moment. The
market could rally in the final days of year," said Soichiro
Monji, chief strategist at Daiwa SB Investments.
    The market was also supported by hopes that Japanese retail
investors who have sold stocks before a rise in the capital
gains tax may soon be buying back shares. 
    Japan will double the capital gains tax to 20 percent on
Jan. 1 but Wednesday is the effective deadline to benefit from
the lower tax rate, because transactions on Thursday will be
settled next year.
    Even if investors do not start buying back immediately, any
tax-related selling will subside from Thursday, potentially
giving a boost to the market, market players said.
    Traders are also pinning hopes on buying from new tax-free
investment accounts, dubbed NISA, for the Nippon Individual
Savings Account, which launch on Jan. 1. The government has
introduced the scheme to lure more Japanese savings to shares to
bolster the economy. 
    Japanese stocks have enjoyed a record-breaking rally this
year, backed by Tokyo's aggressive fiscal and monetary stimulus
aimed at sparking sustainable growth in the world's
third-largest economy.
    The benchmark Nikkei is up 53 percent this year, on track
for its best annual rise since 1972.
    But buying appeared to be led by speculative accounts on
Wednesday, traders said, as they concentrated on a small number
of index heavyweights such as Fast Retailing, which
rose 2.8 percent.
    The broader Topix index was down 0.3 percent at
1,254.17, with volume at less than 40 percent of the full daily
average for the past 90 trading days as of midmorning.
    Food maker Nippon Meat Packers jumped 3.7 percent
after a rating upgrade by Goldman Sachs.
    Softbank fell 1.1 percent following a media report
that it is in the final stages of talks with T-Mobile 
parent company Deutsche Telekom about acquiring the
U.S.-based wireless carrier.

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