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Nikkei climbs to seven-month high on yen’s weakness

JIJI

Stocks advanced Tuesday thanks to a weakening of the yen against the dollar, sending the Nikkei 225 average to a seven-month high.

The Nikkei rose 192.00 points, or 1.24 percent, to finish at 15,668.60, its highest closing since Jan. 23.

The Topix climbed 13.94 points, or 1.09 percent, to close at 1,297.00.

Although the U.S. market was closed Monday for the Labor Day holiday, stocks traded higher from the outset of Tuesday’s trading on the heels of the dollar’s rise past ¥104.50.

The weaker yen fueled expectations for better earnings at export-oriented firms, many of which have set their assumed exchange rate for the current fiscal year at around ¥100 to the dollar, an official at a major brokerage firm said.

Given recent stronger than expected economic indicators in the United States, some market players are expecting the U.S. Labor Department’s jobs data for August, due out Friday, will turn out to be solid, which would provide further downward pressure on the yen.

Stocks extended gains later in the session as the yen’s further drop induced futures-led buying, with the Nikkei briefly rising more than 250 points.

Investors were also cheered by news reports that former Chief Cabinet Secretary Yasuhisa Shiozaki, an advocate of reform of the Government Pension Investment Fund’s investment policy, will likely be given the post of welfare minister in the Cabinet reshuffle Wednesday.

The GPIF, which manages a vast pool of public pension assets, is considering boosting the weighting of domestic stocks in its investment portfolio.

Takuro Hayashi of Iwai Cosmo Securities Co.’s investment research department said the market has started to factor in a possible change in the upbeat economic view of Bank of Japan Gov. Haruhiko Kuroda, who is scheduled to hold a news conference after the central bank’s two-day policy-setting meeting finishes Thursday. The BOJ meeting will be held after a recent series of weak economic data.

“If Kuroda softens his stubborn stance, it will be a plus for the stock market,” Hayashi said.

Rising issues outnumbered falling ones 1,245 to 467 in the first section, while 107 issues were unchanged.

Volume grew to 2.442 billion shares from Monday’s 1.811 billion.

Exporters including automakers Toyota and Honda enjoyed handsome gains on the back of the weaker yen, along with farm machinery maker Kubota.

Olympus closed up 2.96 percent after hitting a year-to-date high on buying prompted by Goldman Sachs’ upward revision to its stock price target.

Also on the plus side were brokerage firms such as Daiwa Securities Group, as well as realtors including Mitsubishi Estate.

Failing to follow the overall market uptrend, construction firm Kumagai Gumi snapped a six-day winning streak on profit-taking.