* For poll data see
* Hopes for easy policy, softer yen seen boosting index
* Market expects resolution of U.S. fiscal cliff
* Exporters, financials, real estate seen growth sectors
* Risks include China slowdown, LDP defeat in upper house
By Ayai Tomisawa
TOKYO, Dec 13 Japan's Nikkei will probably see
double-digit gains next year as easy monetary policy weakens the
yen and a resolution of U.S. fiscal problems lifts sentiment, a
Reuters poll found.
The Nikkei is expected to rise to 11,000 by the end
of 2013, compared with Wednesday's close of 9,581.46, according
to the median forecast of 17 analysts polled by Reuters in the
Market observers said investors would continue buying into
exporters, whose earnings are expected to improve in the coming
fiscal year, helped by a weaker yen.
The yen has weakened since Shinzo Abe, the leader of the
main opposition Liberal Democratic Party who is expected to win
a Dec. 16 general election, called for the Bank of Japan to beat
persistent deflation and a strong yen. His proposals include
"unlimited easing" and setting an inflation target of 2 percent.
The yen was quoted at 82.89 to the dollar on Wednesday, not
far from its 7-1/2-month low of 82.84 touched on Nov. 22.
Since then the Nikkei has risen 2 percent, taking its
year-to-date gain to 13 percent, narrowing the gap with the U.S.
S&P 500's 14 percent rise this year and the pan-European
STOXX Europe 600's 15 percent gain.
"Investors have poured money into the Japanese market on the
assumption that there will be monetary easing by the central
bank next year. This rally should continue through mid-next
year," said Shun Maruyama, chief strategist at BNP Paribas.
By mid-2013, the Nikkei is expected to reach 10,500.
Monetary policy is a big election issue as politicians look
to end deflation and keep the world's third-largest economy from
sliding deeper into recession.
Traders see automotive, electronics, financials and real
estate as sectors to watch, adding that appetite for materials
and construction stocks such as cement makers could rise on
hopes for more public works spending under a LDP-led government.
Contributing to the positive outlook for the Japanese
market, analysts expect that a potential fiscal crisis of
automatic tax hikes and spending cuts in the United States will
eventually be avoided.
RISKS TO NOTE
Japan has seen a series of credit downgrades over concerns
it was not doing enough to curb its debt burden, the world's
largest at twice the value of its annual economic output.
"A weak yen is positive for stocks in general. But just like
'too much medicine' can cause damage to a sick person's body,
excessive easing will cause damage to the country's financial
health," said Kenichi Hirano, at Tachibana Securities.
Other market participants also remained wary about risks
including an abrupt slowdown in China and the reigniting of
concerns about the euro zone debt crisis.
Reflecting such uncertainties, forecasts for the Nikkei
ranged from 9,500 to 13,500 at the end of next year.
Others noted that tension may rise towards next summer, when
the upper house election is scheduled.
"The bigger the hope is for the next government, the more
disappointment the market may see if the LDP's 'manifesto' isn't
achieved," said Norihiro Fujito, senior investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
(Additional polling by Ashrith Doddi and Namrata Anchan;
Editing by Helen Massy-Beresford)