1. Nikkei rises to 10-1/2-month high as weak yen raises strong earnings hopes

Nikkei rises to 10-1/2-month high as weak yen raises strong earnings hopes

Japan's Nikkei share average rose to levels not seen since early January on Friday as the yen weakened further against the surging dollar, raising prospects for better-than-expected exporters' earnings.

By: | Tokyo | Published: November 18, 2016 10:34 AM
The Nikkei was up 0.7 percent at 17,989.73 points by midmorning, after rising as high as 18,043.72, its strongest since Jan. 7. (Reuters) The Nikkei was up 0.7 percent at 17,989.73 points by midmorning, after rising as high as 18,043.72, its strongest since Jan. 7. (Reuters)

Japan’s Nikkei share average rose to levels not seen since early January on Friday as the yen weakened further against the surging dollar, raising prospects for better-than-expected exporters’ earnings.

The Nikkei was up 0.7 percent at 17,989.73 points by midmorning, after rising as high as 18,043.72, its strongest since Jan. 7.

For the week, the index looked set to rise 3.6 percent, which would be its biggest weekly gain since mid-August.

Last week, net buying of Japanese cash stocks by foreign investors hit a seven-month high, helped by expectations that the Trump Administration’s policies will stoke U.S. inflation.

Federal Reserve Chair Janet Yellen, in her congressional testimony, solidified bets that the central bank was on track to raise interest rates in December.

The dollar gained 0.5 percent at 110.68 yen, the highest level since June.

“Some exporters have reduced their dollar-yen assumptions, so if the dollar is trading above 110 yen, their full-year earnings would be better than expected,” said Masashi Oda, general manager at strategic investment department at Sumitomo Mitsui Trust Asset Management.

Exporters gained ground, with Toyota Motor Corp rising 2.5 percent, Honda Motor Co gaining 1.8 percent and Tokyo Electron Ltd adding 2.4 percent.

The sea transport sector was the biggest gainer, rising 2.6 percent after the Baltic Dry Index jumped 7.5 percent to the highest level in two years. Mitsui OSK Lines rose 1.1 percent and Kawasaki Kisen Kaisha advanced 2.8 percent.

The broader Topix gained 0.6 percent to 1,431.19 and the JPX-Nikkei Index 400 added 0.5 percent to 12,853.32.

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