Nikkei rises 1 percent, exporters gain on weak yen

Mon Nov 26, 2012 2:05am GMT

* Investors continue pouring new money into Japan - trader
    * Expectation on monetary ease continue to lift exporters
    * Sentiment positive during U.S. holiday shopping season -
analyst

    By Ayai Tomisawa
    TOKYO, Nov 26 (Reuters) - Japan's Nikkei share average rose
1.0 percent on Monday, nearing a seven-month high on
expectations that a weaker yen will boost earnings for
exporters.
    Major exporters Toyota Motor Corp, Honda Motor Co
 and Canon Inc all rose between 3.0 percent and
3.4 percent and were among the six most traded stocks on the
board by turnover.
    The yen has come under pressure on expectations the Bank of
Japan will be pushed towards more drastic easing, after the
country's opposition party, tipped to win next month's election,
urged radical monetary stimulus to beat deflation.
 
    The dollar traded at 82.35 yen on Monday, near an
eight-month high around 82.84 set last week.
    The Nikkei added 94.84 points to 9,461.64 during
morning trade. If the index touches the 9,500 mark, it will
reach its highest level since April 27. 
    Exporters with high exposure to the euro zone such as Mazda
Motor Corp and Nikon Corp also gained after
the euro climbed against the yen on Monday morning, buoyed by
hopes that Greece will secure further funds to meet its debt
obligations.
    The euro rose as high as 107.10 yen on trading
platform EBS, its highest level since late April.
 
    Mazda gained 3.1 percent and Nikon added 2.4 percent.
    German Chancellor Angela Merkel said she was confident a
deal could be reached to release aid to Greece, while the French
finance minister said a deal was close. Euro zone finance
ministers will meet later on Monday. 
 
   "Although some investors are cautious about the fast-paced
gains in the Japanese market, they will likely stay buyers on
the back of the improving trading environment in the global
market," said Hiroichi Nishi, general manager at SMBC Nikko
Securities.
        
    BOTH VOLUME AND VALUE CATCH UP
    Last week's average daily trading volume was high, with 1.94
billion shares changing hands in the Tokyo Stock Exchange's
first section, up 9 percent from the previous week. Daily
trading value was also positive, with 1.15 trillion yen traded
on the board, up about 13 percent on the previous week.
    Traders said that investors, who were underweight of
Japanese stocks, continued to pour new money in to the Japanese
market on the back or the weakening yen.
     The Nikkei has risen about 11.5 percent so far this year,
putting its performance on a par with the U.S. S&P 500's 
12.05 percent rise and the pan-European STOXX Europe 600's
 11.77 percent gain.
    "On top of ongoing optimism about a weak yen, sentiment is
also positive before the holiday shopping season in the U.S.,"
said Hideyuki Okoshi, general manager at Chibagin Securities.
"Japanese shares have co-relation to U.S. consumer spending."
    The U.S Christmas shopping season kicked off on Black
Friday, the day after Thanksgiving. Since Japanese exporters'
earnings rely on U.S. consumer spending, sentiment is generally
positive around this time of the year, analysts said.
    The National Retail Federation expects sales during the
holiday season to grow 4.1 percent this year compared with last
year's 5.6 percent increase.
    Among other shares, the upbeat sentiment pushed brokerage
shares Nomura Holdings up 2.9 percent to a near
seven-month high and rival Daiwa Securities 3.0 percent
higher.
    Sony Corp and Panasonic Corp 
underperformed, falling 0.8 percent and adding a meager 0.3
percent, respectively after credit rating agency Fitch
downgraded the debt ratings of the companies to "junk" status on
Friday. 
   The broader Topix added 1.3 percent to 786.54.