July 21, 2013 / 11:26 PM / 6 years ago

Nikkei set to rise as Abe election win boosts recovery hopes

TOKYO, July 22 (Reuters) - Japan's Nikkei share average is
expected to rebound on Monday after Prime Minister Shinzo Abe's
ruling bloc and its coalition partner regained control of the
upper house in an election, boosting hopes for a sustained
economic recovery.
    Market players said the Nikkei was likely to trade between
14,600 to 14,900 on Monday after falling 1.5 percent to
14,589.91 on Friday.
    Nikkei futures in Chicago closed at 14,820, up 1.2
percent from the close in Osaka of 14,650.
    "Abe's victory was widely expected, but it gives a positive
lead to the market as it raises expectations that legislation
will pass more easily and he can focus on reviving the economy,"
said Takuya Takahashi, a strategist at Daiwa Securities.
    Abe's victory in Sunday's elections means an end of "twisted
parliament" in which the opposition controls the upper chamber,
allowing him to focus on structural reforms to end stagnation in
the world's third-largest economy.
    Public broadcaster NHK said early on Monday that Abe's
Liberal Democratic Party (LDP) and its partner, the New Komeito
party, had won at least 74 of the 121 seats up for grabs in the
242-seat upper house. 
    Abe's fiscal expansionary policy, coupled with the Bank of
Japan's aggressive monetary stimulus, has pushed the benchmark
Nikkei up 40 percent this year, while the yen has fallen 15
percent against the dollar.
    Analysts said that whether the Nikkei will extend rises
stably after the election will depend on whether Abe can
implement drastic structural reform. But for Monday, the market
may attract buying in most sectors as a drop on Friday served as
a correction, the added.
    "Excessive concern about the overheated market receded
thanks to profit-taking on Friday," said Yutaka Miura, a senior
technical analyst at Mizuho Securities. 
    "Strong buying may be seen in early trade, but the rest of
the day will depend on the moves of the yen. If the dollar nears
101 yen, the market will likely hold gains till the close."
    The dollar last traded at 100.46 yen.
> Nasdaq, Dow slip on tech weakness, S&P 500 edges up 
> Yen rises ahead of Japan vote 
> U.S. bond prices rise for second week; weak stocks support
> Gold up 2nd straight week on Fed stimulus reassurance 
> US crude oil trades above Brent for first time in 3 years
    --Shiseido Co 
    Shiseido has formed a sales company in India as it looks to
broaden its clientele there beyond consumers of luxury cosmetics
now sold through sales agents, the Nikkei reported.
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