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Nikkei ends at 21-month high, up 23% in 2012

JIJI

Stocks closed the year on a robust note Friday, helped by the yen’s further decline, with the Nikkei average hitting a fresh 21-month closing high.

On the final trading day of 2012, the Nikkei 225 closed up 72.20 points, or 0.70 percent, at 10,395.18, its highest finish since March 10, 2011 — the eve of the Great East Japan Earthquake. The benchmark index rose for the fourth straight session.

For the whole of 2012, the Nikkei soared 1,939.83 points, or 22.94 percent, posting the first annual gain in three years and the fastest rate of growth since 2005. It was also the first time since 1999 that the Nikkei has marked a year-to-date high on a closing basis on the final trading day of the year.

The Topix rose 5.71 points, or 0.67 percent, to end at 859.80. Over the past year, it surged 131.19 points, or 18.01 percent.

After opening higher, buoyed by buying of export-oriented issues on the back of the weaker yen, the Nikkei seesawed around 10,400 for most of the session.

The yen fell to around ¥86.50 to the dollar, its lowest level in more than 28 months, and hit a 17-month low against the euro in Tokyo trading Friday morning on expectations of aggressive fiscal policy and monetary easing under the new Liberal Democratic Party administration. The yen’s continued decline raised expectations of an improvement in corporate earnings of domestic firms, brokers said.

“There are strong expectations of further rises (of stock prices),” said Toshiyuki Kanayama at Monex Inc., adding that foreign investors and individual domestic players have been actively purchasing shares.

The Tokyo market will be closed from Monday through Thursday for the year’s end festivities and New Year’s holidays.

Winners outnumbered losers 821 to 732 in the first section. Volume fell to 2.891 billion shares from Thursday 3.469 billion.

U.S. Treasuries buoy JGBs

Japanese government bonds bounced back on the last trading day of the year Friday, following a rise in U.S. Treasuries overnight.

The lead March futures contract on 10-year JGBs ended up 0.15 point from Thursday at 143.65 on the Tokyo Stock Exchange. Volume fell to 24,197 contracts from 34,405.

In late interdealer trading in cash JGBs, the yield on the latest 326th 10-year issue with a 0.7 percent coupon stood at 0.795 percent, down from 0.800 percent Thursday.