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Nikkei soars to highest close in half a decade

JIJI

The Nikkei 225 average soared Thursday to its highest closing in almost six years, thanks mainly to a drop in the yen against other major currencies.

The key index gained 277.49 points, or 1.80 percent, to end at 15,727.12, the Nikkei’s best finish since Dec. 12, 2007, when it stood at 15,932.26. The Topix meanwhile closed 13.96 points better at the day’s high of 1,261.04.

Both indexes advanced for the first time in three days.

The Nikkei rose sharply from the outset as the dollar spurted above ¥102 for the first time in about six months on the back of a series of robust U.S. economic indicators released overnight.

The continued strength of U.S. and European stocks also helped lift Tokyo stocks, brokers said.

In New York on Wednesday, the Dow Jones industrial average hit a record closing high for the fifth straight market day. The S&P 500 index also ended at an all-time high.

The Nikkei stayed in positive territory throughout Thursday’s session as the yen’s drop against the dollar and the euro continued to spur buying in exporters, brokers said, adding that domestic demand-oriented issues also attracted brisk buying.

The weaker yen boosted investor hopes that Japanese companies’ earnings will increase significantly from estimated levels, an official at a bank-affiliated brokerage said.

In particular, the dollar climbed out of its recent narrow trading band and gained further ground against the yen in an encouraging sign for Japanese stocks, the official added.

Market activity remained relatively slow ahead of the Thanksgiving holiday in the United States on Thursday. Attention will have to be paid to the market’s performance after U.S. investors return from the holiday, Yutaka Miura, senior technical analyst at Mizuho Securities Co., suggested.

But Miura also said the TSE will likely be supported by demand from investors who have yet to fully buy into the recent uptrend.

Rising issues outnumbered falling ones 998 to 625 in the first section, while 138 issues were unchanged. Volume came to 2.276 billion shares, compared with 2.167 billion Wednesday.

JGBs gain ground

Japanese government bonds rose despite the stock market’s surge Thursday as the demand-supply balance remained positive.

The lead December futures contract on 10-year JGBs ended up 0.01 point at 145.09 after briefly rising to 145.17 in the afternoon.