Nikkei gains on relief over US jobs, weaker yen | business | Hindustan Times
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Nikkei gains on relief over US jobs, weaker yen

Japan's Nikkei stock average climbed 1.8 per cent on Monday, boosted by better than expected US jobs data, with exporters gaining on a weaker yen and resource-linked firms up on rises in commodity prices.

business Updated: Mar 08, 2010 08:43 IST

Japan's Nikkei stock average climbed 1.8 per cent on Monday, boosted by better than expected US jobs data, with exporters gaining on a weaker yen and resource-linked firms up on rises in commodity prices.

Fujitsu Ltd, Japan's largest IT services firm, fell 3.6 per cent after it said on Saturday it has dismissed advisor Kuniaki Nozoe amid a dispute over the circumstances that led to his abrupt resignation as president last year.

US non-farm payrolls shed 36,000 jobs in February compared with expectations in a Reuters poll for a loss of 50,000. Investors had been worried that severe winter weather would cause a larger drop.

"The non-farm payrolls were better than expected, but not so much better that they'd provoke concerns about the US hiking interest rates soon," said Hideyuki Ishiguro, a strategist at Okasan Securities.

"And last week's news that the Bank of Japan is looking into further easing of its monetary policy is helping too, by having weakened the yen for now."

The benchmark Nikkei rose 182.34 points to 10,551.30 after earlier rising nearly 2 per cent to 10,567.25, a six-week high. The broader Topix gained 1.5 per cent to 924.55.

The dollar rose 0.1 per cent to 90.41 yen after earlier climbing as far as 90.69 yen on electronic trading platform EBS, its highest since Feb. 23.

Investors fret about a stronger yen as it eats into exporters' profits when repatriated.

While the market generally welcomed the jobs figures, some said the numbers simply added energy to a market that was already poised to rise after a recent correction.

"What we have started seeing since last week was a slow lowering of risk aversion. So while the jobs data is helping, I don't think it's the only factor," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Japan Tobacco rose 3.6 per cent to 335,500 yen after Credit Suisse upgraded it to "outperform" from "neutral" and hiked its target price to 360,000 yen from 320,000 yen, citing approval by Japan's Ministry of Finance for a domestic tobacco price hike by US company Philip Morris International ahead of a tobacco tax hike set for October.

"Moreover, this will likely make it easier for JT to adopt a more aggressive pricing strategy to expand profits for the domestic businesses over the medium to long term," wrote analyst Yoshiyasu Okihira.