Nikkei scales 6-mth high, heads for best weekly rise in 4 years

Last Updated: Fri, Nov 15, 2013 04:51 hrs

Japan's Nikkei average surged above the 15,000-mark for the first time in six months on Friday, as strong quarterly earnings buoyed financials while exporters took advantage of the yen's slide to a two-month low against the dollar.

Consensus-beating results or upgrade in earnings guidance helped lift shares in Mitsubishi UFJ Financial Group 0.9 percent, Mizuho Financial Group 1.9 percent and Dai-ichi Life Insurance Co Ltd 3.4 percent.

Mitsubishi UFJ was the fifth-most traded stock on the main board by turnover.

Insurer T&D Holdings Inc gained 2.4 percent as investors bet the financial firm to raise its annual net profit guidance after its six-month earnings reached 62 percent of its full-year target.

The Nikkei advanced 1.1 percent at 15,038.43. It was up 6.7 percent this week, on track for its best weekly performance since December 2009.

"Cash hasn't been that active. Volumes are up but a lot of that is in exchange traded funds," a Tokyo-based senior trader at a European bank said.

Nomura NF Nikkei Avg Leverage Index Link EFT, up 2.1 percent, was the most traded security on the main board.

"People are buying high-beta stuff like Nomura and Daiwa Securities," the trader added.

Nomura Holdings, Japan's top brokerage, jumped 3.5 percent and was the second-most traded.


Currency-sensitive exporters were also in demand after the yen slid to a two-month low of 100.27 to the dollar. A risk-on mood in global markets weighed on the safe-haven yen, which was also hit on Thursday by Finance Minister Taro Aso's remarks that Tokyo must retain currency intervention as a policy tool.

Toyota Motor Corp added 1 percent, Sony Corp rose 3.8 percent and Canon Inc strengthened 1.3 percent.

The benchmark Nikkei has risen 45 percent so far this year and the yen has fallen 15 percent, driven by Prime Minister Shinzo Abe's massive fiscal and monetary stimulus.

But the Nikkei rally -- the best among major developed markets -- has stalled after hitting a 5-1/2 year peak in May as investors were concerned that the promise of structural reform by Abe would fall short of expectations.

Still, the stimulus has been a powerful antidote to help Japan Inc pull out of years of slumber, hurt by the strong yen, a depressed economy and rising competitions from South Korea and China.

Of the 157 Nikkei companies that have so far reported quarterly earnings, two-third of them either beat or met market expectations, according to Thomson Reuters StarMine. That compared with 44 percent in the three-month period a year ago.

Despite the improvements in earnings, a Reuters survey showed Japanese companies remain cautious about boosting wages or investment -- elements that are key for securing a sustainable recovery.

The broader Topix index gained 1 percent to 1,231.15 on Friday morning, with volume at 28 percent of full daily average for the past 90 trading days.

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