September 3, 2014 / 6:41 AM / 3 years ago

Nikkei jumps to 7-month high on renewed "Abenomics" hopes

* Brokerage shares best performers due to pension reform hopes
    * Exporters gain as yen falls near 5-year low
    * Fuji Heavy hits record high

    By Hideyuki Sano
    TOKYO, Sept 3 (Reuters) - Japanese shares hit a seven-month high on
Wednesday, with financial shares leading the gains, in the hope a cabinet
reshuffle by Prime Minister Shinzo Abe giving fresh impetus to his "Abenomics"
growth-promoting policies.
    Exporters' shares also rode high as the yen weakened to an eight-month low
and solid U.S. manufacturing data boosted their business prospects, even though
U.S. shares ended mixed the previous day.
    The Nikkei share average rose 0.4 percent to 15,728.35, the third
consecutive day of gains, which took the market to levels not seen since late
    "The line-up of Abe's new cabinet and top party posts are positive for
Japanese stocks on three fronts," said Ryota Sakagami, chief strategist at SMBC
Nikko Securities.
    "You can expect faster reforms. This will lead to unity in the party and
strengthen his government, and the number of women in the main posts is the
highest ever," he said.
    The increase of female ministers is seen as a symbol of Abe's policy of
promoting the female workforce, which some analysts say is the country's most
underutilised resource. 
    The market was also focused on the appointment of Yasuhisa Shiozaki, a
proponent of an overhaul of Japan's Government Pension Investment Fund (GPIF),
as head the ministry of labour, health and welfare, which oversees the GPIF.
    Shiozaki has called for the GPIF, which is drawing up plans to boost the
weighting of domestic stocks in its portfolio, to buy stocks directly rather
than through asset managers. 
    Hopes that GPIF money could galvanise the share market gave a fillip to
brokerage shares, which rose 0.9 percent to extend their gains so far
this week to 3.6 percent, the best showing among the 33 industry sub-indexes on
the Tokyo Stock Exchange.
    Nomura Holdings rose 0.8 percent while Daiwa Securities Group
 went up 1.0 percent.
    The yen's fall against the dollar helped exporters. 
    Fuji Heavy Industries rose 3.0 percent, hitting a record high at
one point while Mazda gained 0.6 percent. 
    Among the largest companies, Panasonic gained 1.8 percent and
construction equipment maker Komatsu rose 1.3 percent, setting a
10-month high at one point. Robot maker Fanuc rose 1.8 percent. 
    The yen traded at 105.21 yen to the dollar, near a five-year low of
105.45 hit in January.  
    U.S. factory activity was at its strongest level in nearly 3-1/2 years in
August, while construction spending rebounded strongly in July, a further boost
for exporters. 
    "I guess U.S. shares did not benefit much from the data because it could
mean an earlier rate hike. But for Japanese exporters, signs of a strong U.S.
economy are positive," said Soichiro Monji, chief strategist at Daiwa SB
    The broader Topix rose 0.4 percent and so did the new JPX-Nikkei
Index 400.

 (Editing by Alan Raybould and Eric Meijer)
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