May 19, 2013 / 11:38 PM / 5 years ago

Nikkei set to scale fresh 5 1/2-yr highs on weak yen, upbeat U.S. data

TOKYO, May 20 (Reuters) - The Nikkei share average is set to
extend its record-breaking run on Monday, as further weakness in
the yen and signs of an improving U.S. economic outlook bolsters
prospects for higher Japanese corporate earnings in the current
business year.
    Wall Street's record closing highs on Friday is also
expected to underpin the market, likely pushing it to a fresh
5-1/2 year peak.
    Market players said the Nikkei was likely to trade between
15,150 to 15,400 on Monday after rising 0.7 percent to 15,138.12
on Friday. During trade, the index rose as high as 15,157.32,
the highest since December 2007.
    Nikkei futures in Chicago closed at 15,350, up 1.1
percent from the close in Osaka of 15,190.
    Analysts expects exporters to attract buying after the
dollar broke above the 103-yen level on Friday buoyed by strong
U.S. consumer sentiment data.
    The Dow and the S&P 500 finished at fresh record highs on
Friday. 
    Data showed Americans felt better about their economic and
financial prospects in early May, with consumer sentiment at its
highest in nearly six years, while a gauge of future economic
activity rose in April to a near five-year high. 
    "Strength in the U.S. market and signs of a recovery in the
U.S. economy are serving as a tailwind to the Nikkei's further
gains. It's promising that the yen is staying below 100 yen to
the dollar," said Yutaka Miura, a senior technical analyst at
Mizuho Securities. He expects the Nikkei to stay comfortably 
above the 15,000-mark over the medium term.
    Analysts said that investors are increasingly becoming
upbeat about the prospects for higher corporate earnings for the
 fiscal year through March, as the weakening yen has improved
the outlook for many exporters. 
    They expect an average operating profit rise of 30 percent,
compared with the companies' conservative forecasts of around a
20 percent increase in their operating profits.
    Many exporters have used assumptions of around 90-95 yen to
the dollar.
    The dollar last traded at 102.83 yen, taking a breather from
its recent sharp rally, but still not far off a 4 1/2 year high
of 103.32 tapped on Friday.
> Dow, S&P end at records, stocks mark 4th week of gains   
> Dollar tops 103 yen, a 4-1/2-year high, on robust U.S.
data 
> Prices fall on improved consumer sentiment              
> Gold hits 1-month low as Fed pressured to end stimulus 
> Oil rallies for third day, shrugging off firm dollar    
    STOCKS TO WATCH
    
    --Toyota Motor Corp 
    Toyota is planning to increase production of lithium-ion
batteries by six times, as the automaker prepares to eventually
use them in its flagship Prius gasoline-electric hybrid cars,
the Nikkei business daily reported on Sunday. 
    
    --Panasonic Corp 
    Sanyo Electric Co may cease to exist under a reorganization
by Panasonic that includes global jobs cuts, Nikkei reported.
 
    
    --Sony Corp 
    Sony plans to appoint Chugai Pharmaceutical Co 
Chief Executive Osamu Nagayama as chairman, the Nikkei reported.
 
 
    --Yahoo Japan Corp 
    Yahoo Japan said late on Friday it suspected that up to 22
million of its user IDs may have been "leaked" and it detected
an unauthorized attempt to access the administrative system of
its web portal Yahoo Japan, the Kyodo news agency reported.
 
    
    --Mori Seiki 
    Mori Seiki plans to take "sole control" of its German
partner Gildemeister, according to a regulatory filing
published on the Austrian competition authority's website on
Friday.

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