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Overseas rallies push Nikkei again to five-year high

JIJI

The Nikkei 225 average rewrote on Wednesday its highest finish in more than 58 months, with investor sentiment brightened by higher overseas equities.

The Nikkei climbed 105.45 points to close at 14,285.69, the highest closing since June 18, 2008. The Topix climbed 5.77 points to end at 1,194.34, its best since Sept. 8, 2008, after briefly topping 1,200.

Stocks opened sharply higher after the Dow Jones industrial average closed above 15,000 for the first time ever Tuesday on expectations of continuing fund inflows into financial markets.

Investor sentiment was also propped up after Germany’s benchmark DAX stock index renewed its record high and the FTSE 100 index in London ended at the highest level since December 2007.

The key TSE indexes rose in line with the yen’s easing against the dollar in the morning session. The Nikkei climbed above 14,400 in early afternoon trading, with a rise of about 240 points.

Later in the afternoon, however, stock prices cut their gains, pressured by profit-taking after the previous day’s steep rally, brokers said.

In pushing up the Nikkei, market participants welcomed double-digit year-on-year growth of both China’s imports and exports shown in trade statistics released Wednesday, brokers said.

The market’s advance was also helped by buying prior to Friday’s fixing of special quotations to settle May options contracts, brokers said.

“Investors are already setting their sights on 15,000 on the Nikkei average. But a sense of caution lingers over the recent rapid rise,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

Stocks may come under selling pressure after the release of Japanese corporate earnings hits a peak late this week, Suzuki added.

JGBs resilient

Japanese government bonds showed resilience Wednesday despite an overnight drop of U.S. Treasury securities, with market players pinning hopes on the Bank of Japan’s JGB-buying operations.

The lead June contract on 10-year JGBs closed down 0.01 point from Tuesday at 144.72. Volume fell to 19,066 contracts from Tuesday’s 23,810.

In late interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon stood at 0.590 percent, down from 0.595 percent late Tuesday.