Nikkei scales 21-month high as weak yen lifts exporters

The Nikkei share average climbed to a 21-month high on Thursday, led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency weighed on the yen.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » Markets » International Markets

Dec 27, 2012, 10.00 AM | Source: Reuters

Nikkei scales 21-month high as weak yen lifts exporters

The Nikkei share average climbed to a 21-month high on Thursday, led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency weighed on the yen.

Like this story, share it with millions of investors on M3

Nikkei scales 21-month high as weak yen lifts exporters

The Nikkei share average climbed to a 21-month high on Thursday, led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency weighed on the yen.

Post Your Comments

Share Cancel

Nikkei scales 21-month high as weak yen lifts exporters
The Nikkei share average climbed to a 21-month high on Thursday, led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency weighed on the yen.

Also read: US fiscal woes cap Asian shares, yen stays weak

The Nikkei advanced 0.9 percent to 10,325.62, taking the index deeper into "overbought" territory, with its 14-day relative strength index at 77.8, far above the 70 which is considered overbought, and often indicates an imminent pullback.

"People are back in the office today after the overseas markets ... and putting on some positions based on what we saw after the cabinet appointment and LDP policy decision," a dealer at a foreign brokerage said, referring to the ruling party.

"It's going to be interesting to see what's going to happen in the market in the afternoon session and tomorrow because Tokyo closes pretty much for the entirety of next week. There is a lot of headline risk that could happen ... I would not be surprised to see some profit-taking," the broker said.

Finance Minister Taro Aso said Prime Minister Shinzo Abe has ordered him to compile a stimulus package without sticking to the previous government's cap on new bond issuance, signalling a more aggressive policy to kick-start the ailing economy.

Exporters benefiting from the yen's weakness included Toyota Motor Corp , Honda Motor Co , Nikon Corp and Panasonic Corp, all up between 0.7 and 1.5 percent.

The yen was quoted at 85.65 to the dollar on Thursday after hitting a more than two-year low of 85.735 yen on Wednesday.

A weaker yen helps lift exporters' overseas earnings when repatriated, thereby improving their competitiveness, particularly against South Korean and Chinese rivals.

Insurers also rose sharply, up 1.7 percent, as the rally in stocks boosted the value of their equity holdings.

The broader Topix gained 0.9 percent to 855.57.

The benchmark Nikkei has risen 19.3 percent over the past six weeks, taking the year-to-date gain for the Nikkei to 22.2 percent, outpacing a 12.9 percent rise in the U.S. S&P 500 and a 14.7 percent gain in the pan-European STOXX Europe 600.

Japanese equities carry a 12-month forward price-to-earnings ratio of 12.6, slightly cheaper than the S&P 500's 12.8 but more expensive than STOXX Europe 600's 11.5, data from Thomson Reuters Datastream showed.

Buy, Hold, Sell ? Hear it first on M3
Nikkei scales 21-month high as weak yen lifts exporters

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login