Nikkei up for fourth day after Greek deal, bolder easing hope

Tue Nov 27, 2012 7:11am GMT

* Nikkei has risen nearly 9 pct over past two weeks
    * LDP leader calls for bolder easing
    * Greek deal provides support but upside limited - trader
    * Domestic-demand driven stocks in favour, exporters down
    * Foreigners post pre-market net buy orders for 12th day

    By Ayai Tomisawa
    TOKYO, Nov 27 (Reuters) - Japan's Nikkei share average
nudged up to a seven-month closing high on Tuesday, supported by
a deal on reducing Greece's debt and a comment from Japan's
opposition leader calling for bolder monetary easing.
    However, analysts cautioned the market's recent surge may be
losing momentum after a 9 percent gain in the past two weeks,
and big-name exporters weakened as investors took profits.
    Domestic-demand driven stocks such as banks and real estate
firms still found favour, with Sumitomo Mitsui Financial Group
 gaining 1.0 percent and Mitsui Fudosan 
advancing 1.8 percent.
    The Nikkei closed up 0.4 percent at 9,423.30, its
fourth straight day of gains and its highest close since April
27.
    Japanese opposition leader Shinzo Abe, who is expected to
win a December election, said on Tuesday the country cannot
restore its fiscal health without overcoming deflation, calling
for bolder monetary and fiscal stimulus to revive the
economy. 
    His comment lifted the dollar comfortably above 82 yen and
help trim some earlier losses among exporters, whose earnings
benefit from a weaker yen. The dollar last traded at 82.27 yen
.
    "Abe's comments helped sentiment," said Fujio Ando, a
strategist at Chibagin Asset Management. "But there may be some
correction in the market in the coming days, although the
fundamental mood should stay positive."
    Traders said investors, who were underweight Japanese
stocks, continued to pour new money into the market as the yen
has weakened sharply on expectations of a new government
determined to pressure the central bank into more easing.
    Data showed net pre-market buy orders from foreign houses
for a 12th straight day.
    
    EYES ON GLOBAL ECONOMY
    Sentiment was also bolstered by news that euro zone finance
ministers and the International Monetary Fund clinched an
agreement on reducing Greece's debt in a breakthrough to release
urgently needed loans to keep the near-bankrupt economy afloat.
 
    "The Greek deal provides comfort somewhat, but to see
further gains in the market, we need more catalysts such as
further weakening in the yen," said Naoki Fujiwara, a fund
manager at Shinkin Asset Management.
    Among exporters, Toyota Motor Corp, Honda Motor Co
 and Nikon Corp fell 1.1-1.4 percent. The
stocks have risen 14-18 percent over the past two weeks.
    "Investors are still staying as buyers, but they are
shifting to domestic-demand stocks as they are cautious of the 
steep rise in exporters," said Hikaru Sato, a senior technical
analyst at Daiwa Securities.
    The market is now expected to focus on the U.S. fiscal
policy standoff, which may limit the upside potential for equity
markets until there are signs of progress.
    Republicans in the U.S. Congress on Monday called on
President Barack Obama to detail long-term spending cuts to help
solve the country's fiscal crisis, while holding firm against
income tax rate increases for the wealthy sought by Democrats. 
 
    Notable gainers included Toyobo Co which rose 4.7
percent to a 4-1/2 month high of 111 yen after Daiwa Securities
hiked the fiber maker's rating by two notches to 'buy' from
'neutral', saying operations such as its life science business
may see a profit recovery.
    The Nikkei has added 11.45 percent so far this year, putting
its performance on a par with the U.S. S&P 500's 11.82
percent rise and the pan-European STOXX Europe 600's 
11.23 percent gain.
    The broader Topix added 0.3 percent to 781.60.