Nikkei hits 15-year high; 20,000 threshold within reach

Stocks gained further ground Wednesday on the Tokyo Stock Exchange thanks partly to the yen’s weakening, lifting the Nikkei 225 stock average to a 15-year high.

The benchmark Nikkei average limbed 149.27 points, or 0.76 percent, to end at 19,789.81, the highest closing since April 17, 2000. The Topix index of all first-section issues finished up 9.92 points, or 0.63 percent, at 1,588.47.

Stocks got off to a firmer start with investors cheering rises in European share prices overnight and the yen’s drop against the greenback. Export-oriented names were hunted on expectations for better earnings.

After the initial buying ran its course, however, the market grew top-heavy on profit-taking as players retreated to the sidelines to await the results of the Bank of Japan’s two-day Policy Board meeting through Wednesday.

Following the central bank’s announcement it would not be changing its monetary policy, stocks came under selling pressure in the early afternoon. But they regained upward momentum soon, with the Nikkei rising as high as 19,845.53.

“Investors who had anticipated the BOJ’s decision on fresh monetary stimulus sold stocks right after the announcement but were forced to buy them back as there was no follow-through selling,” said Nobuyuki Fujimoto at SBI Securities Co. “In addition, those who had refrained from active purchases before the BOJ meeting felt comfortable with buying after the key event.”

Another major securities firm official noted that the market’s downside was underpinned by a good supply-demand balance and expectations for improved earnings at companies on the back of economic recovery.

The Nikkei’s recovery to 20,000 is in sight, according to brokers.

Although concerns remain over the fast rising pace, the market has started to gather momentum to help the index retake the threshold, a bank-affiliated securities firm official said.

Rising issues overwhelmed falling ones 1,314 to 440 in the first section, while volume increased to 2.291 billion shares from Tuesday’s 2.095 billion.

Higher crude oil prices pushed up oil developers Inpex and Japan Petroleum Exploration as well as oil distributors JX Holdings, Cosmo Oil, Showa Shell Sekiyu and TonenGeneral Sekiyu. Also on the plus side were electronics maker Sony, technology firm Kyocera, shipbuilder Kawasaki Heavy, advertising agency Dentsu, cosmetics maker Shiseido and retail giant Aeon. Other major winners included Recruit Holdings and mobile phone carrier Softbank.

By contrast, Toyota and Fuji Heavy Industries met with selling after UBS Securities Japan downgraded its investment ratings and stock price targets on the automakers. Tire maker Bridgestone and Toyo Tire & Rubber were also downbeat.

Nikkei Futures

nikkeifutures.org@imediaone.com

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