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Nikkei rewrites six-month closing high on weaker yen

JIJI

The Nikkei 225 average renewed its six-month closing high Wednesday, driven by purchases on the back of the yen’s easing against other major currencies.

The key market gauge rose 28.16 points to end at 15,646.23, its highest level since Jan. 23. On Tuesday, the key market gauge climbed 88.67 points.

The Topix advanced 1.83 points to end at 1,292.24 after rising 4.34 points Tuesday.

Both indexes extended their winning streak to a fourth session.

Despite an overnight drop in New York equities, the TSE opened higher thanks to the yen’s easing against other major currencies.

The easier yen helped push up several export-oriented names, including automakers and electronics makers, and the Nikkei’s heavily weighted component names, brokers said.

The key indexes, however, briefly slipped into negative territory in the morning, pressured by profit-taking amid a short-term sense of overheating after the Nikkei advanced for three straight sessions through Tuesday.

In the afternoon, the market’s upside grew heavy as investors retreated to the sidelines to see the outcome of the U.S. Federal Reserve’s two-day policy meeting and the release of U.S. gross domestic product data for April-June, both due out later Wednesday, brokers said.

“Stock prices have been underpinned by solid earnings reports” from key Japanese companies, said Akira Tanoue, a deputy managing director at Nomura Securities Co.

“I believe expectations are also high for the rest of companies, which will release their earnings” Wednesday and Thursday, when the April-June earnings reporting season peaks, Tanoue said.

Many analysts said the market is ready to test its upside to 16,000. But Yutaka Miura, senior technical analyst at Mizuho Securities Co., said “the Nikkei has been still in a range between 15,000 and 15,600.”

“Index futures have attracted buybacks, but few funds have flowed into the cash stock market, in view of scarce volume,” Miura said.

Despite the key indexes’ advance, falling issues outnumbered rising ones 948 to 701 in the first section, while 166 issues were unchanged.

Volume increased to 1.943 billion shares from Tuesday’s 1.681 billion.

Honda shot up 3.10 percent after raising its earnings forecast for the year. Rivals Toyota and Nissan were also upbeat.

Mitsubishi Electric surged 3.43 percent after the electronics maker announced better than expected April-June earnings Wednesday afternoon.

Also on the plus side were mobile carrier SoftBank, clothing retailer Fast Retailing and construction machinery maker Komatsu.

On the other hand, McDonald’s plunged 2.75 percent a day after withdrawing its full-year projection due to the chicken meat scandal in China.

In the financial sector, brokerage firm Nomura, megabank group Mizuho and nonbank lender Aiful came under selling pressure.

Other losers included electronics maker Hitachi, robot maker Fanuc and steelmaker JFE.