Nikkei climbs to 7-week high as exporters gain

By Masayuki Kitano

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 1 percent to a seven-week high on Thursday, with exporters such as Sony Corp (6758.T: ) climbing after the yen dipped and U.S. wholesale inventories fell unexpectedly in January.

Gains in financial shares also helped buoy the broader market, with big banks such as Mizuho Financial Group (8411.T: ) rising after a rally in their U.S. peers and consumer lenders extending gains after an upbeat brokerage report on the sector.

“There was some buying in shares of major banks in the morning, and that helped provide a sense of reassurance to the overall market,” said Tsutomu Yamada, a market analyst at kabu.com Securities.

Despite the broader rise in financial shares, Shinsei Bank (8303.T: ) slid 3.9 percent to 100 yen after the Financial Times reported that the bank is preparing to raise about 75 billion yen ($830 million) in a new share issue.

The Nikkei (.N225: ) gained 1 percent or 101.03 points to 10,664.95, finishing at both a seven-week intraday and closing level high.

The broader Topix index rose 0.9 percent to 930.38 (.TOPX: ).

“Trade by foreign investors and funds backed by domestic individual investors’ money are dominating the market now as Japanese institutional investors can’t really move actively because this month is the end of the business year in Japan,” said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.

The latest Finance Ministry data shows that overseas investors bought a net 261.5 billion yen ($2.9 billion) in Japanese stocks last week, bringing their total net buying in 2010 to more than 2 trillion yen.

“The next top focus will be on important events in Japan, the United States and Europe all happening next week, namely the Federal Reserve and the Bank of Japan policy reviews as well as Greece’s future plans.”

EU finance ministers meet on March 16 to discuss Greece’s financial problems, and their exit strategies from fiscal stimulus measures worth hundreds of billions of euros that were agreed in late 2008 to battle the global crisis.

BOJ MEETING EYED

The dollar dipped 0.2 percent to 90.38 yen, having backed off a two-week high of 90.83 yen on trading platform EBS on Wednesday.

But gains in the yen were expected to be limited after sources told Reuters that the Bank of Japan is leaning toward easing monetary policy again next week.

Stock market investors welcome a weaker yen as it boosts exporters’ profits when they are repatriated.

Tokyo shares could get a boost if the Bank of Japan expands its monetary easing steps next week, said Mitsushige Akino, chief fund manager for Ichiyoshi Investment Management.

One possibility is for the BOJ to increase the amount of its fixed-rate fund supply operation to 20 trillion yen from the current 10 trillion yen, Akino said.

Such a step may have little direct impact on the economy but could help Tokyo shares by curbing rises in the yen, he said.

“I think the reason the BOJ might make clear its monetary easing stance would be to prevent yen strength,” Akino added.

Exporters rose, with tech shares also helped after the Nasdaq Composite Index (.IXIC: ) gained 0.8 percent on an unexpected fall in U.S. wholesale inventories for January. <.

Sony rose 1.9 percent to 3,440 yen and Kyocera (6971.T: ) climbed 1.2 percent to 8,650 yen.

Shares of consumer lenders extended gains after Nomura Securities earlier this week said Promise’s (8574.T: ) business in Hong Kong will likely see steady growth due to the increasing middle class population there and cited the business expansion potential if it could break into the Chinese market.

Promise climbed 2.8 percent to 771 yen, after surging about 14 percent the previous day following the Nomura report. Rival Acom (8572.T: ) jumped 7.6 percent to 1,448 yen after a 4.6 percent gain the day before.

Among major banks, Mizuho Financial rose 1.1 percent to 187 yen.

Stock Market Today

(Additional reporting by Aiko Hayashi; Editing by Chris Gallagher)

Nikkei climbs to 7-week high as exporters gain