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Nikkei makes robust start to ’13 as U.S. averts ‘cliff’

JIJI

Stocks scored handsome gains Friday, the first trading day of the year, buoyed by the yen’s fall and relief over a last-minute deal to keep the U.S. economy from being derailed by the so-called fiscal cliff.

The Nikkei 225 closed up 292.93 points, or 2.82 percent, at 10,688.11, the highest finish since March 4, 2011. The Tokyo market was closed Monday through Thursday for the yearend and New Year’s holidays. The Topix finished up 28.71 points, or 3.34 percent, at 888.51.

Both indexes extended their winning streak to a fifth session.

The Nikkei surged more than 300 points in early trading thanks to the yen’s weakening against the dollar and the euro after the U.S. Congress approved a bill Tuesday to avert the fiscal cliff. U.S. President Barack Obama signed the legislation into law Thursday.

Despite lackluster performances of other Asian equities, Tokyo stocks maintained the strong tone throughout the day. In the afternoon, the Nikkei was stuck in a narrow range amid a wait-and-see mood prior to the release later Friday of U.S. government employment data for December, brokers said.

“The yen’s weakening fueled expectations for upward revisions of Japanese corporate earnings estimates, especially by automakers and electronics producers,” said Hiroaki Hiwada at Toyo Securities Co. “Not only foreign investors but also individual Japanese investors actively picked up stocks.”

Purchases by individual investors were supported by easier regulations on margin trading introduced this month, according to brokers.

“Market players felt a sense of relief after the United States temporarily avoided a fiscal crisis. Hopes also grew for a U.S. economic recovery,” said Hiroichi Nishi at SMBC Nikko Securities Inc.

Rising issues overwhelmed falling ones 1,553 to 110 in the first section, while volume swelled to 3.409 billion shares 2.891 billion Dec. 28.

JGBs fall on ‘cliff’ deal

Japanese government bonds lost ground Friday, the first trading day of 2013, with a key futures contract hitting a seven-month low as stock prices soared thanks to a deal to avert the U.S. “fiscal cliff.”

The lead March futures contract on 10-year JGBs fell as low as 143.20 before closing at 143.32, down from 143.65 on Dec. 28, the final trading day of 2012. Turnover grew to 26,847 contracts from 24,197.