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Nikkei advances on hopes of dovish Fed, weak oil prices
December 17, 2014 / 2:36 AM / 3 years ago

Nikkei advances on hopes of dovish Fed, weak oil prices

* 50-day moving average supports Nikkei - trader
    * Tumbling oil prices a boon for Japanese exporters
    * Japan Tobacco falls on Russia fears

    By Thomas Wilson
    TOKYO, Dec 17(Reuters) - Japanese stocks rose on Wednesday
as hopes of a continuation of the U.S. Federal Reserve's dovish
stance on rates helped exporter shares brush off a stronger yen,
and chart support  staunched the Nikkei's recent losses.
    The Nikkei benchmark ticked up 0.5 percent to
16,834.53 by 0155 GMT, after quickly recouping slim losses at
the open. 
    On Tuesday the benchmark closed at its lowest level since
Oct. 31, when the Bank of Japan shocked markets by unexpectedly
easing policy. But traders said the correction has likely run
its course, with the Nikkei now propped up by its 50-day moving
average of 16,554.52.
    "The technicals in the market are the real support for us
today," said Gavin Parry, managing director of Parry
International Trading.
    The Fed's policy meeting wraps up on Wednesday, and policy
statement is expected at 1900 GMT, with investors looking to see
how dovish the U.S. central bank's stance is on interest
rates.[ID: nL1N0TU1P9][ID: nL1N0U01BK]
    Traders said that sentiment toward the Nikkei was boosted by
the prospect of soft U.S. inflation lowering the probability of
tightening by the Fed.
    Plummetting crude oil prices , down by a half
since June, have weakened inflation, which aside from providing
a dovish influence on the Fed, also helps industrialised nations
generally, and will be a boon for Japan's exporters.
    "The fall in oil prices is a huge positive for Japan and for
industrial countries," said Takashi Hiroki, chief strategist at
Monex. "It's a plus for American demand, which means a plus for
the world." 
    With the rouble falling by as much as a fifth on Tuesday, 
threatening a repeat of Russia's 1998 financial crisis,
investors became more risk averse, and some turned to the 
safety of the yen - even though the Japanese currency has been
in danger of losing its safe haven status. [ID: nL6N0U00MY]
    Exporter shares, however, shrugged off the stronger Japanese
currency, which traded at around 116.71 at 0202 GMT. 
    Automakers Nissan Motor Co Ltd and Honda Motor Co
Ltd ticked up 0.4 percent and 0.9 percent respectively.
    On the negative ledger, Japan Tobacco Inc, highly 
exposed to Russia, led the Nikkei's losses, tumbling 6.6 percent
to an 8-month low.
    The broader Topix added 0.4 percent to 1,358.15,
while the JPX-Nikkei Index 400 also gained 0.4
percent to 12,326.67. 

 (Reporting by Tom Wilson; editing by Simon Cameron-Moore)

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