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Yen drop sends Nikkei to six-month closing high

JIJI

The Nikkei average hit a six-month closing high Thursday, buoyed by purchases fueled by a weakening of the yen.

The Nikkei 225 average shot up 289.52 points, or 1.92 percent, to 15,365.60, its best finish since May 22. On Wednesday, the key market gauge retreated 50.48 points.

The Topix climbed 12.88 points, or 1.04 percent, to 1,246.31, the highest closing since May 22, after falling 3.43 points Wednesday.

Despite a drop on Wall Street, stock prices here enjoyed handsome gains from the outset on the back of the yen’s fall against the dollar.

The Nikkei briefly rose more than 300 points thanks to index futures-led purchases after the yen further eased against the dollar.

The TSE’s topside was capped, however, due to poor performances of Asian equities following a disappointing reading on the HSBC China manufacturing purchasing managers’ index for November, brokers said.

The Nikkei’s rise was buoyed by advances in heavily weighted component issues, such as SoftBank, Fanuc and KDDI, brokers said.

In addition to the yen’s fall, market participants took heart from data that showed foreign investors logged as much as ¥12.949 billion in net purchases of Japanese securities from Nov. 10 to 16.

The data, released by the Finance Ministry before the opening bell, proved “foreign investors’ strong buying appetite,” said Hiroaki Hiwada, senior strategist at Toyo Securities Co.

Investor sentiment was also brightened by a report announced by a government panel after Wednesday’s closing bell urging the Government Pension Investment Fund to review its bond-centered portfolio. The fund is the world’s largest institutional investor, managing some ¥120 trillion in public pension assets.

Rising issues far outnumbered falling ones 1,198 to 419 in the first section, while 142 issues were unchanged. Volume rose to 2.520 billion shares from Wednesday’s 2.178 billion.

JGBs soften

Japanese government bonds were weaker Thursday, but the downside was limited by buying on dips.

The lead December contract on 10-year JGBs shed 0.14 point to end at 144.77.

Volume increased to 21,818 contracts from Wednesday’s 18,833.