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By Elaine Lies
TOKYO, June 6 (Reuters) - Japan’s Nikkei average rose 1.03 percent to hit a five-month closing high on Friday, marking a second straight positive week, as Canon Inc (7751.T) and other exporters gained on a stronger dollar, while higher oil prices boosted energy firms and trading houses.
But gains were checked by Japan Tobacco Inc (2914.T), which tumbled 5.6 percent after media reported the government may lift the tobacco tax to more than triple the present price for a pack of cigarettes in the face of rising pension and welfare spending.
Market players were also hesitant about pushing the Nikkei higher ahead of U.S. jobs data due out later on Friday, although most said it is possible the benchmark could hit its year’s high next week.
“Today’s movement is based on the stronger dollar and a rise in oil and resources,” said Tomomi Yamashita, a fund manager at Shinkin Asset Management.
“The subprime issue is moving behind us as an issue and the stage is being set for the next topic: the economy. Macro issues, as measured by indicators, will now have a strong impact.”
Looming on the horizon are U.S. May payrolls data, with a fifth straight month of job losses predicted on the back of flagging consumer confidence and the worst housing bust in generations. The economy is expected to shed 58,000 jobs, a Reuters poll of 90 economists showed.
But market players were guardedly optimistic, noting that jobs data out earlier this week has been largely positive, with an ADP report on Wednesday showing the U.S. economy added 40,000 jobs and data released on Thursday marking a surprise fall in weekly jobless claims.
“Though the Nikkei is suffering from a dearth of buying factors, if the jobs figures show a strong improvement Wall Street could rise and boost Japanese stocks, perhaps push the Nikkei as far as 15,000,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
“We could see a rise to the year’s high next week, but it’s unlikely the Nikkei will hang on to those gains.”
The Nikkei’s high for the year so far is 15,156.66 set on Jan. 4, the first trading day for 2008.
The benchmark Nikkei .N225 gained 148.32 points to 14,489.44 after earlier rising as far as 14,601.27. It gained 1.1 percent on the week.
The broader TOPIX .TOPX rose 0.3 percent to 1,428.11.
Market players said while the 14,600 level has been tough to break, technical factors suggest a sharp — if brief — rise is possible if the Nikkei manages to rise above 14,725.69, the 200-day moving average, suggesting upward momentum.
Another factor that could boost the Nikkei is that June 13, next Friday, is the settlement day for Nikkei futures and options, which often leads to volatile trade during the preceding week. Shinkin’s Yamashita said short positions have piled up in the market, another possible rising factor.
The dollar clung above 106 yen JPY= by afternoon trade on Friday, though it was below earlier highs touched after news of surprisingly strong U.S. retail sales data for May. But its strength still boosted exporters.
Oil and gas field developer Inpex Holdings Inc (1605.T) rose 4 percent to 1.3 million yen and top oil distributor Nippon Oil Corp 5001.T rose 3.3 percent to 748 yen. Trading firm Marubeni Corp (8002.T) rose 2.5 percent to 944 yen.
The biggest drag on the Nikkei by volume weight, though, was Japan Tobacco, which slid to 485,000 yen after media reports that a pack of cigarettes may rise to 1,000 yen ($9.44) from around 300 yen at present. [ID:nT289630]
“It’s down on the report of the tax hike, that’s inevitable. After all, a rise to 1,000 yen is big enough that a lot of people would probably quit smoking,” Ichiyoshi’s Akino said.
Trade picked up, with 2.37 billion shares changing hands on the first section of the Tokyo stock market, compared with last week’s daily average of 1.98 billion.
Declining shares outpaced advancing ones by nearly two to one. (Editing by Michael Watson)