Tokyo stocks rebound on first day of new fiscal year

08:44, April 02, 2010      

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Japan's Nikkei Stock Average rebounded Thursday as the market got a boost from positive data concerning business sentiment released by Japan's central bank and the dollar's rise against the yen on the first day of the nation's new fiscal year.

The key benchmark Nikkei advanced 154.46 points, or 1.39 percent, to 11,244.40, marking a fresh 18-month closing high. The broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 6.45 points, or 0.66 percent, to 985.26.

Along with exports, brokers said that commodities supported the market as prices rose and a continued sense of optimism about a global economic recovery spurred buying as investors became emboldened by rising prices across Asian equities.

Additionally, the Bank of Japan's (BOJ) much-awaited quarterly Tankan survey, an index gauging conditions in major manufacturing and non-manufacturing sectors across Japan, was well received by investors and fueled optimism that Japan's economy is on track for recovery, brokers said, noting as well that Dai-ichi Life Insurance Co. Ltd.'s positive debut on the market also buoyed sentiment.

Japanese business confidence continued to improve in the three months through March amid pickups in exports and production, the Bank of Japan's Tankan survey showed, with its key index of sentiment among big manufacturers rising 11 points to minus 14 for the fourth straight quarter of increase.

For the next three months through June, the confidence index is expected to rise further to minus 8, up 6 points, the BOJ reported.

"Sentiment is likely to remain solid for the rest of this year, as support from the global recovery, especially in emerging economies, is unlikely to disappear anytime soon," said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Securities Co.

"Shares will rise even further after the Tankan and Dai-ichi Life IPO, the huge events that investors were watching for, passed without trouble," said Yoshihisa Okamoto, a senior strategist at Mizuho Asset Management Co.

Dai-ichi, the most actively traded stock in Japan in terms of both volume and value, opened at 160,000 yen, 14 percent higher than its initial offering price of 140,000 yen.

Trade was halted immediately after the first price was settled, a special measure taken by the Tokyo bourse to make sure the huge listing went smoothly. The bourse decided to take the extraordinary step of only accepting orders till 1 p.m., when all trading of the stock was halted in order to determine its price on the first day of listing, even though other stocks are traded till 3 p.m. The shares will trade normally on Friday.

"The shares opened up 14 percent at 160,000 yen so everyone made a profit. I think this is positive for investor sentiment," said Hideyuki Ishiguro, a strategist at Okasan Securities.

The dollar was up 0.1 percent against the yen at 93.52 yen, having hit a three-month high at 93.65 yen. The yen also fell against the euro, slipping as far 126.63 yen from 125.06 yen at the close of trading in Tokyo on Wednesday. Investors cheer a weaker yen against other major currencies as overseas yields are not diminished when repatriated.

Subsequently, exporters and tech issues rose with robotics maker Fanuc Ltd. gaining 2.9 percent to 10,210 yen, the firm's highest close since June 2008, and Daikin Industries Ltd., the world's second-largest air conditioner maker, advanced 3.3 percent to 3,950 yen.

Hitachi Ltd., surged 5.44 percent to 368 yen and Canon Inc. advanced 0.81 percent to 4,365 yen. NEC Corp. rose 2.74 percent to 2,097 yen and counterpart Ricoh Co. Ltd. gained 3.36 percent to 1, 509 yen.

Other bright spots on the market were Ebara Corp., a pump maker, soaring 5 percent to 501 yen after Deutsche Securities upgraded the shares to "buy" from "hold" and raised their target price to 600 yen from 300 yen, saying the visibility for future earnings has improved.

Yahoo Japan Corp. gained 2.9 percent to 35,050 yen after reports said the company is in talks with China's Taobao to link their Internet shopping sites.

Some 2.4 billion shares changed hands on the Tokyo exchange's first section, up from Wednesday's volume of 2 billion shares.

Advancing shares outnumbered declining ones by 947 to 576.



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