March 11, 2013 / 7:21 AM / 6 years ago

Nikkei ends at 4-1/2-yr high, financials and exporters rise on weak yen

* Financial stocks lead gains, index up 0.5 pct
    * Honda, Nissin helped by higher Citi targets
    * Shiseido surges on news that president to leave

    By Ayai Tomisawa
    TOKYO, March 11 (Reuters) - The Nikkei share average closed
at a 4-1/2-year high on Monday as investors bought financials
and exporters after the yen weakened on signs of recovery in the
U.S. economy, while hopes for monetary easing aided risk
    The Nikkei closed up 0.5 percent to 12,349.05, a
level not seen since just before the collapse of Lehman Brothers
roiled global markets in September 2008.
    The broader market's gains were underpinned by the yen
slumping to more than 96 per dollar, its weakest since August
2009, after a strong U.S. jobs report on Friday. 
    "Expectations for the next fiscal year's earnings are
positive, so investors are chasing the market higher," said
Makoto Kikuchi, the chief executive of Myojo Asset Management.
    He said that if listed companies in late April and May
forecast increases averaging 60 percent for their operating
profits in the year ending March 2014, then the Nikkei could top
13,000 by June.
    Signs of a recovery in the U.S. labour market bolstered
Japanese stocks, which are already riding a bullish streak on
expectations of aggressive easing by the Bank of Japan under
governor nominee Haruhiko Kuroda.
    "This time, the yen weakened not because of Japan but
because of the United States, or the recovery in the U.S.
economy. It's not something that foreign countries can criticise
Japan for," said Naoki Fujiwara, fund manager at Shinkin Asset
    The Topix surged 1.9 percent to 1,039.98. Volume was
high, with 4.59 billion shares changing hands, compared to last
week's average daily volume of 3.44 billion shares.
    Financials led the sectoral gainers. The banking sub-index
 jumped 5.5 percent, while the securities and
insurance sectors advanced 4.9 percent and 3.4 percent
    Sumitomo Mitsui Trust Holdings Inc rose 2.3 percent
after the bank said it would repay 200 billion yen ($2.1
billion) in public bailout money, ending more than a decade of
partial government ownership. 
    Mizuho Financial Group Inc and Mitsubishi UFJ
Financial Group Inc gained 4.9 and 6.4 percent
respectively in heavy trade as the softer yen and government's
reflationary policies were expected to stimulate demand for
loans, traders said.
    "On a dollar basis, Japan is now significantly
outperforming, and from that perspective it's reflecting the
real recovery signs emerging globally for Japanese exports that
go beyond the weaker yen," said Stefan Worrall, director of cash
equities for Credit Suisse in Tokyo.
    Shares of Honda Motor Co Ltd and Nissan Motor Co
Ltd got an extra boost from a Citi report that raised
their target prices. On Monday, Honda rose 2.6 percent and
Nissan was up 3.2 percent.
    Sharp Corp was out of favour, falling 3.1 percent
after the Asahi newspaper said Hon Hai Precision Industry Co Ltd
 would not invest in the troubled electronics maker
before a March 26 deadline. 
    Shiseido Co Ltd jumped 6.6 percent on news the
president of Japan's largest cosmetics company will end an
underwhelming tenure that saw profits drop dramatically. The
current chairman will take his place. 
    While hopes for the reflationary policies of Prime Minister
Shinzo Abe's government's have already lifted financials, real
estate and land asset stocks such as warehouse and railroad
companies, interests in these sectors will likely continue,
market participants say.
    The real estate sector has gained about 28
percent this year while the Nikkei has added 19 percent.
    Compared with real estate elsewhere, Japan's high yielding
assets "are attractive to overseas investors," said Masayuki
Kubota, senior fund manager at Daiwa SB Investments.
    He said real estate stocks such as NTT Urban Development Co
 and Daibiru Corp, plus warehouse stocks like
Mitsui-Soko Co and Sumitomo Warehouse Co have
attractive valuations in terms of net asset value.
    On Monday, NTT Urban rose 4.6 percent, Daibiru added 1.4
percent, Mitsui-Soko jumped 11 percent and Sumitomo Warehouse
gained 5.3 percent.
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