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Nikkei extends gains as Japan's Abe backs sub-zero rates

Source : REUTERS
Last Updated: Thu, Nov 15, 2012 05:30 hrs

TOKYO, Nov 15 (Reuters) - The Nikkei average extended gains on Thursday afternoon after Japan's main opposition leader, Shinzo Abe, who is expected to win next month's election, said he wants the Bank of Japan to adopt interest rates of zero or below zero to enhance lending.

His comments pushed the yen to a 6-1/2-month low against the dollar at 80.83, a boost for Japanese exporters who gain when returning overseas earnings to Japan and lifting their future competitiveness.

The Nikkei rallied 1.8 percent to 8,817.88, hitting a one-week high, on track for its biggest one-day percentage gain in a month.

"The stock market cheers Abe's comment indicating further easing, and is inviting buying," said Chisato Haganuma, chief strategist at Mitsubishi UFJ Securities.

"The stock market is not a fan of uncertainty, and by this comment, investors finally get the feeling that there is more clarity in this country's political climate."

Among the exporters rallying were Toyota Motor Corp , Honda Motor Co, Canon Inc and TDK Corp, up between 3.9 and 4.6 percent.

The broader Topix index climbed 2 percent to 736.17.




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