Nikkei rises 2.2 percent after yen weakens on BOJ report

By Elaine Lies

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 2.2 percent on Friday, as a report that the Bank of Japan was considering monetary easing steps helped the yen to weaken and after better-than-expected U.S. monthly retail sales.

Exporters such as Kyocera Corp (6971.T: ) led the climb while property firms gained as well on hopes that a potential Bank of Japan (BOJ) move would lead to lower borrowing costs and prompted short-covering in the sector, a trader at a Japanese brokerage said.

The Nikkei newspaper reported that the BOJ has begun examining a further easing of its already ultra-loose monetary policy and may make a decision on such a move as early as this month.

Market players welcomed the possibility, noting that March is the last month of the Japanese business year and a weaker yen would have a positive impact on earnings for Japanese firms. A stronger yen eats into exporter profits when repatriated.

“This has definitely had the biggest impact today,” said Norihiro Fujito, general manager at the investment research and information division of Mitsubishi UFJ Securities.

“Even if the decision is made next month, they want the impact of the move in this business year, to weaken the yen and reduce the impact of deflation at a time that will affect earnings.”

The benchmark Nikkei (.N225: ) climbed 223.24 points to 10,368.96, erasing a 1.1 percent decline booked the previous day and rising 2.4 percent on the week, its fourth positive week this year. It gained a mere 3 points last week.

The broader Topix (.TOPX: ) added 1.5 percent to 910.81 and the dollar gained 0.3 percent to 89.27 yen. (FRX/: )

“If dollar/yen climbs back above 90 yen, the Nikkei could break out of range-bound trade, with the next target likely being around 10,500,” said Mitsuo Shimizu, deputy general manager at Cosmo Securities.

Fujito said foreign investors, among others, apparently sold stock futures on Thursday, helping to push the benchmark Nikkei down. Friday’s moves were mainly short-covering, with hedge funds and commodity trading advisors (CTAs) also likely taking part, he said.

EYES ON JOBS, CHINA

Market players also said that investors were wary ahead of the weekend and U.S. jobs data.

“The problem with the jobs data is that it’s such a volatile indicator, especially given all the snow last month — some people say the number could climb as much as 100,000 jobs or more lost. So nobody really wants to push the market higher before this is out,” said Fujito.

Forecasts are for a cut of 50,000 jobs..

Exporters climbed after the yen weakened and Wall Street rose on encouraging U.S. economic data, including better-than-expected retail sales figures. Retail sales were thought to have been hurt by the severe weather across the United States last month.

Kyocera rose 2.6 percent to 8,150 yen and Sony Corp (6758.T: ) rose 3.4 percent to 3,205 yen.

Canon Inc rose 2.4 percent to 3,855 yen. It declared its bid for Oce (OCEN.AS: ) unconditional, sending a clear message to shareholders holding out for a better deal it is set to tie up the acquisition.

Canon extended the offer to March 19 with the aim of buying all shares in the Dutch printer maker.

Among property firms, Mitsubishi Estate Co (8802.T: ) gained 2.9 percent to 1,409 yen and Sumitomo Realty & Development Co (8830.T: ) jumped 4.6 percent to 1,632 yen.

Some 1.7 billion shares changed hands on the Tokyo exchange’s first section, well below last year’s daily average of 2.3 billion.

Advancing shares outnumbered declining ones by more than 11 to 1.

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(Additional reporting by Aiko Hayashi; Editing by Edwina Gibbs)

Nikkei rises 2.2 percent after yen weakens on BOJ report