Nikkei hits 3-week closing high, exporters climb

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 2.7 percent to its highest close in three weeks on Monday, led by exporters such as Canon Inc (7751.T: ) after investors on Wall Street took the Federal Reserve’s discount rate hike as a sign the financial system is healing.

The surprise rise in the discount rate pushed Tokyo shares lower on Friday on concerns that overseas markets would see the move as a harbinger of faster-than-expected rate rises.

Shares of exporters climbed as the dollar edged higher against the yen, extending gains made last week after the Fed’s move. Trading house Mitsui & Co (8031.T: ) and other resource shares rose on a rebound in commodities prices that had fallen sharply after the discount rate hike.

“A rebound in futures, which had pushed down Japanese stocks on Friday, is buoying the market after European and U.S. stocks (Read more about the stock market today. ) held their ground,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

“The possibility of rate hikes in the United States is becoming more realistic, but fundamentals have been improving little by little and the market is factoring in this possibility relatively smoothly.”

In light trade, the benchmark Nikkei (.N225: ) gained 276.89 points to 10,400.47, its highest finish since February 3 and the first break in a month above its 25-day moving average of around 10,300.

The index lost 2.1 percent on Friday.

The broader Topix (.TOPX: ) added 2.3 percent to 909.75.

The dollar was trading around 91.60 yen after touching a high of 92.16 yen on Friday, its highest point since early January. Investors welcome a weaker yen as it boosts exporters’ profits when they are repatriated.

The Shanghai stock market (.SSEC: ) was almost unchanged after returning from a week-long holiday for the Lunar New Year.

Investors had been eager to see how shares responded to China’s surprise hike of bank reserve requirements on February 12, though some market players said the action had been factored in.

In other market-related news, Dai-ichi Mutual Life Insurance, Japan’s second-largest life insurer, said it would sell about 1.07 trillion yen ($11.7 billion) of shares in Japan’s largest initial public offering in more than a decade.

EXPORTERS LEAD

Recall-hit Toyota Motor Corp (7203.T: ) rose 1.2 percent to 3,340 yen on short-covering and despite a July 2009 company document that showed it was aware of sudden acceleration complaints.

The document, obtained by Reuters, seems sure to add to the debate about whether Toyota missed or ignored red flags about a rising number of complaints.

Toyota President Akio Toyoda will appear before the U.S. House Committee on Oversight and Government Reform on Wednesday.

“What we’re seeing today is basically just Toyota erasing Friday’s losses … ,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

“But gains will be capped by market wariness ahead of Toyoda’s testimony later this week, and fears that this problem likely will drag on.”

Among other exporters, Canon climbed 3.9 percent to 3,850 yen and Sony Corp (6758.T: ) advanced 3.4 percent to 3,200 yen. Kyocera Corp (6971.T: ) added 3.4 percent to 8,320 yen.

Shares of Nikon Corp (7731.T: ) climbed 3.6 percent to 2,038 yen after the head of its camera division said the company is likely to beat its digital camera sales forecast for the financial year to March on strong demand in China and other parts of Asia.

Bridgestone Corp (5108.T: ) gained 3.8 percent to 1,516 yen after Japan’s largest tiremaker reported a surge in quarterly profit after government incentives boosted car demand, though it forecast slower-than-expected growth this year as it faces high materials costs.

Resource-linked shares gained after oil prices rose to a six-week high above $80 a barrel and copper touched a three-week high on Friday, with other metals gaining as well.

Mitsui & Co rose 3.9 percent to 1,405 yen and fellow trader Marubeni Corp (8002.T: ) advanced 3.9 percent to 536 yen. Oil and gas field developer Inpex (1605.T: ) climbed 1.8 percent to 684,000 yen.

Trading volume was subdued, with 1.6 billion shares changing hands on the Tokyo exchange’s first section (.TV1.T: ), well below the average daily volume last month of roughly 2.6 billion shares, and also below last year’s daily average of 2.3 billion shares.

Advancing stocks outnumbered decliners by 15 to 1.

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(Additional reporting by Elaine Lies; Editing by Hugh Lawson)

Nikkei hits 3-week closing high, exporters climb