Nikkei at 8-mth top as US data cheers

TOKYO: Japan’s Nikkei climbed to an eight-month high on Thursday after the dollar jumped against the yen following robust US private-sector jobs data, while Resona surged 14 per cent on speculation it would soon launch a planned share sale. Shares of blue-chip exporters rose, with Toyota Motor Corp gaining 2.6 per cent and Hitachi Ltd rising 2 per cent, leading the Nikkei’s advance after the greenback posted its best one-day gain in more than three months against the yen on Wednesday.

Trading volume picked up sharply as more investors tap into riskier assets on hopes of economic recovery. Around 2.4 billion shares changed hands on the Tokyo Stock Exchange’s first section, well above last week’s average of around 1.3 billion. Advancing issues outpaced declining ones by 1,250 to 302.

“If the weakening yen trend continues, there will likely be continuous buying in Japan stocks in the midterm,” said Hidenori Suezawa, chief strategist at Nikko Cordial Securities.
The benchmark Nikkei gained 1.4 per cent, or 148.99 points, to 10,529.76. That was the highest level since its May 14 peak of 10,551.69, which now becomes its next target.
The broader Topix index gained 1.4 per cent to 924.51.
The Nikkei breached the psychologically important barrier of 10,500 yen after the ADP Employer Services report showed US private employers added 297,000 jobs in December, the largest ever gain, adding to evidence the US economy is on a recovery path.
The jobs figures come two days ahead of the US government’s closely watched and more comprehensive payrolls report for December, prompting economists to raise forecasts for that data.
“Markets will now wait for US payrolls on Friday for confirmation of the strong trend. But investors will then focus more on how the US data will impact the dollar/yen rate,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
“Investors have already taken in stride positive news from the US and will now look for new trading factors. After Friday they will immediately shift their focus to the performance of US companies as the earnings season starts next week.”-Reuters

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