Nikkei set to extend rally as yen hits 9-month low

TOKYO, Feb 27 — Japan’s leading share index is expected to open higher today, extending this month’s gains of nearly 10 per cent, with exporting stocks likely to attract interest after the yen fell to a nine-month low against the dollar.

Strategists expects the Nikkei to trade between 9,650 and 9,800, up from Friday’s seven-month closing high. Nikkei futures in Chicago closed at 9,705 on Friday, up 65 points or 0.7 per cent from the Osaka close of 9,640.

“I don’t think G20 will affect the market trend. The key is the yen depreciation,” said Takashi Hiroki, chief strategist at Monex Inc.

Japanese exporters’ earnings have been hit by a strong yen as well as supply disruptions caused by last year’s massive earthquake and Thai floods, and so the yen’s drop since a surprise central bank easing this month should offer some respite.

The dollar was last traded at 81.55 yen after hitting 81.66 yen, its highest since May 31.

A senior Japanese Finance Ministry official said at the G20 meeting in Mexico City that upward pressure on the yen was easing and he saw nothing strange as it pulls away from record highs below ¥80 per dollar.

At the G20 summit, leading economies told Europe it must put up extra money to fight its debt crisis if it wants more help from the rest of the world, piling pressure on Germany to drop its opposition to a bigger European bailout.

The Nikkei broke above 9,600 to its highest closing level in seven months at 9,647.39 on Friday, while the broader Topix index advanced 0.6 per cent to 834.29.

The benchmark Nikkei is up 9.6 per cent this month, on track for its best February performance since 1991.

The index has risen 14 per cent so far this year, boosted by a run of strong US economic data, the European Central Bank’s liquidity injection of nearly half a trillion euro, and further easing steps by the Bank of Japan and the Bank of England.


Sony declared a return to the smartphone business on Sunday, but warned the group’s painful transition would not be as fast as rebranding.


Kansai Electric Power is expected to forecast a net loss of more than ¥200 billion (RM1.83 billion) for the year ending March, which would be the utility’s biggest annual loss ever, the Nikkei business daily said on Saturday.

Financial group

Rival megabanks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group have begun talks on breaking up their joint venture Mobit Co, as Sumitomo plans to make consumer lender Promise Co Ltd  a wholly owned unit in April, the Nikkei reported.

Otsuka Holdings Co Ltd

US health regulators have approved Otsuka America Pharmaceutical’s breath test to detect bacterial infection that causes stomach inflammation and ulcer, for use in children aged 3 to 17 years.

Softbank Corp

Softbank said it will hire more than 2,400 college graduates and mid-career employees in 2012, a recruiting drive nearly unmatched among Japanese firms, the Nikkei reported. — Reuters 



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