Nikkei soars to 4-1/2-yr high as Kuroda seen likely next BOJ governor
* Exporters, financials lead gains as yen tumbles * yen slumps to 33-month low as Kuroda's BOJ nomination eyed * Nomura ups end-2013 target for Nikkei to 14,500 on TPP participation hope By Ayai Tomisawa TOKYO, Feb 25 (Reuters) - The Nikkei average soared 2.4 percent to a 53-month high on Monday with exporters leading gains on a weaker yen, after sources said Japan was likely to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as its next central bank governor. Currency-sensitive exporters led the charge after the yen hit a 33-month low of 94.77 yen to the dollar on Monday, while financials and real estate companies also advanced as they stood to benefit from reflationary policy. Sony Corp gained 3.4 percent, Honda Motor Co added 1.6 percent and Toshiba Corp rose 2.9 percent. The Nikkei climbed 276.58 points to 11,662.52, its highest level since late September 2008. "Earlier this month, the market priced in the possibility of (Toshiro) Muto, who is seen less aggressive, as the most probable candidate," said Kyoya Okazawa, head of global equities and commodity derivatives at BNP Paribas in Tokyo. But Kuroda's emergence as the frontrunner for the top BOJ post prompted investors to chase the market higher, he said. Sources said the government is likely to nominate Kuroda and two deputies this week for parliamentary approval. It is also lining up Kikuo Iwata, an academic who advocates unorthodox monetary easing steps, and BOJ Executive Director Hiroshi Nakaso, who now oversees the central bank's international operations, as deputy governors, a source familiar with the process said. The benchmark Nikkei has rallied nearly 35 percent since mid-November, driven by a weaker yen as Prime Minister Shinzo Abe pursued bold fiscal expansionary and monetary easing polices aimed at reigniting the economy. Lender Mizuho Financial Group rose 2.0 percent and Mitsubishi UFJ Financial Group advanced 2.7 percent and were the top most and the second most traded stock, while real estate company Mitsui Fudosan soared 6.9 percent. The sea transport sub-index rose 6.6 percent as the best sectoral gainer on the main board, with Kawasaki Kisen Kaisha Ltd jumping 12 percent and Nippon Yusen KK advancing 5.5 percent. A sector upgrade from Morgan Stanley MUFG also boosted the stocks. The broader Topix added 1.8 percent to 980.70 in fairly active trade, with 3.37 billion shares changing hands. It compares with last week's average daily volume of 2.93 billion shares. MORE UPSIDE SEEN IN THE LONG-TERM Sentiment also got a lift from the Japan-U.S. summit over the weekend in which Abe and U.S. President Barack Obama discussed bilateral issues including economic and trade issues, analysts said. The United States and Japan agreed language during Abe's visit that could set the stage for Tokyo to join negotiations soon on a U.S.-led regional free trade agreement known as the Trans-Pacific Partnership. "We think that the economic effects of TPP participation are likely to be very long-term," said Hiromichi Tamura, chief strategist at Nomura Securities. It sees a high likelihood of Japan participating in the TPP agreement at some point in 2013, and raised its end-2013 forecast for the Nikkei to 14,500 from 12,500. Boosted by the yen's sharp fall, Japanese companies' earnings outlook has improved sharply. "If the Nikkei-listed companies were to post as much as a 60 percent increase in net profit by average, the index's price-to-earnings for the year ending March 2014 would be around 14, and the Nikkei could rise to as high as 13,000 by the summer," said Makoto Kikuchi, the chief executive of Myojo Asset Management. Still, Kikuchi added that a sharp drop in the yen could also create negative effects for some Japanese companies and the economy such as rising gasoline prices.
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