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Nikkei briefly hits three-month high

JIJI

Stocks climbed further on the Tokyo Stock Exchange Wednesday after gains in overseas stocks and on hopes for additional monetary easing and economic stimulus in Japan, with the Nikkei average briefly hitting the highest level in almost three months.

The 225-issue Nikkei average rose 18.55 points, or 0.09 percent, to end at 19,649.18, after retaking 19,800 for the first time since Aug. 20 on an intraday basis. On Tuesday, the key market gauge advanced 236.94 points.

The Topix index of all first-section issues edged up 0.42 point, or 0.03 percent, to 1,586.53, after gaining 14.58 points the previous day.

The Nikkei average rose above 19,800 in early trading after the U.S. and major European equity markets gained ground Tuesday amid easing wariness over the economic impact of Friday’s deadly terror attacks in Paris.

Stock prices were also shored up by hopes that the Bank of Japan may take additional easing steps at its two-day policy-setting meeting from Wednesday and that the government may draw up a large-scale supplementary budget to finance economy-boosting programs, brokers said.

After the initial buying ran its course, the market’s upside was weighed down by some profit-taking.

In the afternoon, the Nikkei average trimmed gains and the Topix temporarily fell into negative territory following news of bomb threats to two Air France flights bound from the United States to Paris, brokers said.

“Investor sentiment worsened in the afternoon as the bomb threat news hit the market amid a dearth of fresh positive incentives,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

Active buying was held in check in the afternoon also because investors retreated to the sidelines prior to the announcement of the BOJ’s monetary policy decision on Thursday.

Many analysts believe the BOJ will not take additional easing steps, given the recent upward trend of Tokyo stock prices and the yen’s stable weakness against the dollar, but some expect a surprise easing decision by the central bank, brokers said.

“A slightly positive incentive would push up the Nikkei above 20,000,” SBI Securities’ Suzuki said, citing as an example a surge of some 200 points on the Dow Jones industrial average.

Falling issues outnumbered rising ones 980 to 797 in the TSE’s first section, while 137 issues were unchanged.

Volume decreased to 1.94 billion shares from Tuesday’s 2.25 billion shares.

Hopes for monetary easing measures triggered buying of realtor and financial issues. Among them were Sumitomo Fudosan and Mitsubishi Estate and megabank groups Mitsubishi UFJ and Mizuho, as well as nonbank lenders Acom and Orient Corp.

Large-cap issues such as automaker Toyota, electronics maker Sony and mobile carrier SoftBank were also upbeat.

On the other hand, Japan Post Holdings, Japan Post Bank and Japan Post Insurance came under profit-taking, brokers said.

Also on the minus side were industrial robot maker Fanuc, insurer Tokio Marine and mobile carrier KDDI.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average inched up 10 points to end at 19,690.