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Nikkei rises to fresh 1-year high on strong Wall St; defensive stocks catch up
December 12, 2016 / 3:01 AM / a year ago

Nikkei rises to fresh 1-year high on strong Wall St; defensive stocks catch up

* Nikkei trades 6 pct above 25-day moving average

* TDK soars on news it is in talks to buy U.S. chipmaker

By Ayai Tomisawa

TOKYO, Dec 12 (Reuters) - Japan’s Nikkei share average rose to a fresh one-year high on Monday morning helped by strong Wall Street performance and a weak yen, while investors picked up defensive stocks that were lagging behind in the recent rally.

By mid-morning break, the Nikkei rose 0.8 percent to 19,142.82 after hitting as high as 19,280.93, the highest level since mid-December last year.

Shares in the food sector and other defensive stocks staged a rally as traders say investors are picking up shares in sectors that have lagged in the month-long rally since Donald Trump’s presidential election. The rally may continue through the year end unless there is a negative surprise in the U.S. Federal Reserve’s decision this week, they added.

“Although people are worried that the market is being overbought in a short period of time, they started to think that the Nikkei may continue rising and end this year at the highest level this year,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The Nikkei is trading about 6 percent above its 25-day moving average of 18,051. A level above 5 percent is seen as overbought.

The Fed is widely expected to hike interest rates for the first time in 2016 at a two-day meeting that begins on Tuesday.

The dollar edged up 0.1 percent to 115.43 yen after earlier touching 115.55 yen, its loftiest peak since February, boosting the overall mood.

Food stocks, which were lagging behind the rises in exporters and financials, were higher. Kikkoman Corp jumped 7.1 percent and Ajinomoto Co soared 5.0 percent.

Utility stocks also gained ground, with Tokyo Gas rising 4.7 percent and Osaka Gas advancing 2.3 percent. Railroad stocks were stronger, with East Japan Railway gaining 1.7 percent and West Japan Railway surging 3.4 percent.

Separately, TDK Corp jumped 3.7 percent after sources said that the company is in talks to buy U.S. chipmaker InvenSense Inc that produces motion sensors for Apple Inc and Samsung Electronics Co.

The broader Topix added 0.2 percent to 1,528.43 and the JPX-Nikkei Index 400 advanced 0.3 percent to 13,691.41. (Reporting by Ayai Tomisawa)

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