Nikkei hits 3-mth high on US economy hopes
Japan’s Nikkei stock average rose 1.5 per cent today after earlier hitting a three-month high, with exporters climbing on a weaker yen and hopes the worst may be over for the US economy.business Updated: Apr 06, 2009 10:51 IST
Japan’s Nikkei stock average rose 1.5 per cent on Monday after earlier hitting a three-month high, with exporters climbing on a weaker yen and hopes the worst may be over for the US economy.
No impact was seen from Sunday’s launch by North Korea of a long-range rocket that flew over Japan, though some analysts warned the market could face some selling after recent sharp rises.
“There’s no news about any further launches, and this is really old news now,” said Yutaka Miura, a senior technical analyst at Shinko Securities.
Toyota Motor Corp climbed 1.9 percent to become the biggest contributor to the Nikkei 225 by volume weight after the Nikkei business daily said Japan is considering subsidies of up to 300,000 yen for purchases of gasoline/electricity hybrids and other low-emission vehicles to shore up slumping auto demand.
“There’s no question that the market is getting a little overheated in the short term, but the weaker yen will prompt buying,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.
The dollar hit its highest level in nearly six months against the Japanese currency, rising 0.4 per cent to 100.68 yen.
The growing optimism about the US economy, fed by robust results from BlackBerry maker Research in Motion and comments by Federal Reserve Chairman Ben Bernanke that the central bank will do everything it can to stabilise banks, even helped the market shrug off jobs data showing the highest unemployment rate since 1983.
But market players said that while the benchmark Nikkei could well rise above 9,000 during Monday trade, a level unseen since early January, gains above that would be hard.
“After all, none of the major US problems have exactly been solved, and there isn’t likely at this point to be any new US policy coming out,” said Shinko’s Miura.
“Given that the market is a bit overheated, it’s a good level for investors to lock in profits.”
The benchmark Nikkei gained 133.24 points to 8,883.08 after earlier rising as far as 8,936.04, its highest since Jan. 7.
The broader Topix rose 1.1 per cent to 840.60.
The auto sector powered higher, extending sharp gains from the previous week, with the transport subindex rising 1.8 percent to touch levels not seen in five months.
Toyota rose to 3,760 yen and Honda Motor Co gained 1.6 per cent to 2,830 yen. Nissan Motor Co climbed 1.3 per cent 470 yen.
Tech shares advanced after the Nasdaq outperformed other indexes after BlackBerry maker Research in Motion, a Canadian firm, posted surprisingly strong results after the bell on Thursday and its US-listed stock jumped 21 per cent.
Canon Inc rose 2.6 per cent to 3,150 yen and Panasonic Corp gained 4.2 percent to 1,265 yen. Sony Corp rose 3.1 per cent to 2,470 yen.
(Reporting by Elaine Lies; Editing by Chris Gallagher)