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Nikkei rises in thin trade, exporters gain on weaker yen
December 25, 2012 / 3:16 AM / 5 years ago

Nikkei rises in thin trade, exporters gain on weaker yen

TOKYO, Dec 25 (Reuters) - Japan's Nikkei share average rose
on Tuesday as exporters gained on a weaker yen, but volume was
thin due to a lack of participants during the Christmas holiday.
    By the midday break, the Nikkei was up 1.3 percent
at 10,066.61.
    Exporters led the gains, with Honda Motor Co adding
1.3 percent, Fanuc Ltd rising 2.3 percent and Canon Inc
 rising 2.4 percent.
    Tuesday's buying may have run its course as the holiday
doldrums set in, analysts said, but profit-taking should be
limited as the weak yen was bolstering sentiment.
    "Today's participants are not trading aggressively, but as
long as the yen stays weak, the market may keep up its strength
throughout the day," said Takuya Takahashi, a strategist at
Daiwa Securities.
    The dollar last traded at 84.71 yen, having risen as
high as 84.965 yen on Tuesday morning, its best level since
April 2011. A weak yen boosts exporters' overseas earnings when
    "Ongoing optimism about the weak yen is lifting hopes that
exporters' earnings will be better than expected," said Hiroichi
Nishi, general manager at SMBC Nikko Securities.
    Shinzo Abe, who is set to become prime minister on
Wednesday, renewed pressure on the Bank of Japan to adopt a
higher inflation target. Abe said he would try to revise a law
guaranteeing the BOJ's independence if his demand for a binding
2 percent inflation target - double its current goal - is not
    But analysts also said that a correction may be possible in
the next few days as the Japanese market has become overbought.
    After rising 16.2 percent over the last six weeks, hitting a
nine-month high last Friday, the Nikkei is in "overbought"
territory, with its 14-day relative strength index at 72.34,
above 70 which is deemed the overbought threshold and signalling
that a correction may be imminent.
    The broader Topix gained 0.9 percent to 839.79 in
thin trading, with 1.23 billion shares changing hands by the
midday break. That compares with last week's average daily
trading volume of 3.53 billion shares.

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