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LEAD: Nikkei jumps nearly 2% on resource gains despite yen at 15-yr high.

TOKYO, Oct. 14 Kyodo


Japan's Nikkei index jumped nearly 2 percent Thursday, lifted by strong gains in resource-linked stocks amid the prospect of monetary easing in the United States, largely shrugging off the yen's advance to its highest level against the U.S. dollar in more than 15 years.

The 225-issue Nikkei Stock Average advanced 180.00 points, or 1.91 percent, from Wednesday to 9,583.51. The broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 14.30 points, or 1.74 percent, to 836.95.

The market headed higher with resource-linked stocks leading the gainers as expectations the Federal Reserve will inject more money into the financial system continued to weaken the dollar while sending gold and commodities prices higher, brokers said. Singapore's decision to tighten monetary policy during the day added to dollar weakness.

Sentiment was also buoyed after global stock markets rallied the previous day. The release of solid earnings reports from Intel Corp. and JPMorgan Chase & Co. drove the Dow Jones Industrial Average up some 0.7 percent to a five-month closing high Wednesday.

''The yen hit a new high after the Singapore news and it shouldn't be good for stocks,'' said Masayoshi Okamoto, equity strategist at Jujiya Securities Co. ''But on the contrary, exporter stocks are higher despite the strong yen...and there seem to be expectations for currency intervention.''

''It's kind of irrational when we think about a weak dollar, and higher gold and stock prices. But the market is following the flow at a time when hopes for monetary easing in the United States are playing out,'' Okamoto added.

Inpex surged 18,000 yen, or 4.1 percent, to 454,500 yen, and Mitsui Mining and Smelting jumped 11 yen, or 4.8 percent, to 257 yen. Sumitomo Metal Mining advanced 57 yen, or 4.1 percent, to 1,454 yen.

Although the dollar fell below the recent low of 81.37 yen marked Monday, exporter stocks were broadly higher. Sony went up 51 yen, or some 2 percent, to 2,640 yen, and Kyocera gained 250 yen, or nearly 3 percent, to 8,630 yen, while Toyota Motor, the day's second most traded stock in value terms, rose 84 yen, or about 3 percent, to 2,930 yen.

Still, brokers said the persistently strong yen was still a concern as it eats into Japanese companies' overseas profits when brought back home. They added the market was making up for the losses incurred earlier this month when shares of major exporters were battered in the Nikkei's three-day losing streak that saw the index shed some 3 percent.

Global stocks have shown strong performances, helped by the release Tuesday of the minutes of the Fed's meeting in September that indicated the U.S. central bank may take easing steps ''before long.''

''Commodities prices have been rising sharply and expectations that the Fed is almost certain to loosen monetary policy are at the heart of it, particularly after the minutes were released,'' said Tsuyoshi Segawa, equity strategist at Mizuho Securities Co.

''We are seeing moves toward more risk-taking,'' Segawa added. ''But considering the fact that loose monetary policy is taken because the real economy is not performing well, there is also a sense that (global financial markets) are going a little bit too far.''

Advancers outnumbered decliners 1,157 to 377, with 122 others remaining unchanged on the First Section.

All 33 sectors on the TSE rose, with the securities sector rising more than 4 percent to become the biggest winner, followed by the real estate, and oil and coal sectors.

Mitsubishi UFJ Financial Group, the day's value leader, rose 2 yen, or 0.5 percent, to 396 yen, and volume leader Mizuho Financial Group gained 2 yen, or 1.7 percent, to 122 yen.

Trading volume on the main section increased to 2,175.63 million shares, from Wednesday's 1,890.23 million.

The TSE's Second Section index ended marginally higher, up 0.03 point at 2,040.61 on a volume of 10.74 million shares. On the Osaka Securities Exchange, the near-term December Nikkei 225 index futures contract climbed 160 points to 9,570.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Oct 18, 2010
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