July 4, 2014 / 1:35 AM / 3 years ago

Nikkei rises to 5-1/2-month high after strong U.S. jobs report

* Seven & i rises to 6-month high on strong earnings
    * Dai-ichi Life drops on share issuance
    * Nikkei up 2.2 pct for the week

    By Ayai Tomisawa
    TOKYO, July 4 (Reuters) - Japan's Nikkei share average rose
to a 5-1/2-month high on Friday as a much-stronger-than-expected
U.S. jobs report fueled investors' appetite for riskier assets,
while the weak yen lifted exporters.
    The Nikkei was up 0.7 percent at 15,459.22 points by
mid-morning after hitting a high of 15,490.37 earlier, its
highest level since January 23. For the week, the benchmark has
added 2.2 percent.
    On Thursday, both the Dow and S&P 500 ended at their third
consecutive record highs in holiday-shortened session before the
July 4 Independence Day holiday, when the U.S. stock market will
be closed.
    Nonfarm payrolls increased by 288,000 jobs, the Labor
Department said on Thursday. Economists polled by Reuters had
forecast a gain of 212,000. 
    Analysts said that the U.S. jobs report bodes well for the
Japanese market in the coming months. Even if the strong U.S.
economy suggests that the Federal Reserve may consider raising
rates sooner than later, it is good for the Japanese market in
the long term.
    "If the U.S. economy is strong and the rates rise, the
dollar will be strong so it's good for Japanese shares," said
Hiromichi Tamura, chief strategist at Nomura Securities.
    He added that if the April-June earnings for Japanese
companies are strong and the results prove that companies are
riding out the impact of the April sales tax hike, the Japanese
market will likely rise further later in the month to August.
    Exporters were in demand after the dollar rose to its
highest in over two weeks at 102.27 yen. Honda Motor Co
 rose 1.1 percent, Sony Corp gained 1.3 percent
and Tokyo Electron Ltd added 1.4 percent.
    Seven & i Holdings Co soared 2.9 percent to a
six-month high after it posted a 5 percent rise in quarterly
profit and kept its forecast for a record full-year profit
unchanged as its own-brand merchandise helped drive growth.
    Bucking the strength, Dai-ichi Life Insurance Co 
dropped 2.0 percent as it will issue up to 275.9 billion yen
($2.7 billion) in new shares to help fund its planned
acquisition of U.S. peer Protective Life. 
    The broader Topix gained 0.4 percent to 1,283.85,
and the new JPX-Nikkei Index 400 advanced 0.4
percent to 11,662.82.

 (Editing by Kim Coghill)

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