Nikkei hits seven-month high on Wall Street rise


Stocks rose Wednesday, buoyed by overnight gains in U.S. equities and the weaker yen, with the benchmark Nikkei 225 average ending at its highest level in more than 7½ months.

The Nikkei gained 56.14 points, or 0.59 percent, to close at 9,581.46, the highest finish since April 19, after briefing topping 9,600 for the first time since late April. The Topix rose 5.22 points to end at 791.29.

The Nikkei opened above 9,600, boosted mainly by advances in export-oriented issues on the back of Wall Street’s firmness and the yen’s weakening against the dollar and the euro.

The key index trimmed the gains on profit-taking in the late morning but regained momentum somewhat in the afternoon, led by rises in index futures.

The market was partly helped by receding uncertainties over the course of the global economy after a media report that talks to avert the U.S. “fiscal cliff” have made progress and an unexpectedly strong German economic sentiment indicator, brokers said.

In addition, “trading volume of index futures shows that rollover has been going smoothly ahead of the fixing of SQ (special quotations to settle index futures and options contracts) on Friday, giving investors a feeling of safety,” said Hideyuki Suzuki, general manager and head of investment market research department at SBI Securities Co.

But wariness over the rapid rally over the past month capped the upside, with some technical indicators signaling the market has been overbought, Suzuki said.

Investors will be paying attention to the outcome of the U.S. Federal Reserve’s two-day policy-setting meeting to be released later Wednesday, brokers said.

“But reaction to the upcoming Fed decision may prove to be limited, as the yen has not risen despite investor expectations of additional monetary easing due to hopes for additional easing action by the Bank of Japan at its meeting next week,” Suzuki said.

Winners outnumbered losers 911 to 593 in the first section, while 185 issues were unchanged. Volume meanwhile rose to 1.939 billion shares from Tuesday’s 1.544 billion.

JGBs inch higher

Japanese government bonds advanced slightly in slow trading Wednesday.

The lead March contract on 10-year JGBs ended up 0.05 point from Tuesday at 144.70. Volume fell to 20,253 contracts from 24,053.