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Financial markets have reacted positively to surprise interest rate cuts by the U.S. Federal Reserve.

World markets are counting on further 50-basis-point cuts by the Fed’s policy committee at its May 15 meeting.

Attention is also on the Liberal Democratic Party’s presidential election. Junichiro Koizumi’s reported lead in local preliminary polls is fueling expectations of reforms.

Following Toyota Motor Corp.’s lead, Nintendo Co. said it will buy back and retire a chunk of its own shares worth some 300 billion yen.

Changes in the business stances of leading Japanese firms, symbolized by these decisions, will lift the market in the mid-to-long term.

The yen rise over the dollar is enticing foreign investors to bolster long yen positions.

A growing inflow of public funds between the second half of April and mid-May is also boosting share prices.

Semiconductor prices are also showing signs of bottoming out, brightening prospects for high-tech equities.

The benchmark 225-issue Nikkei average now appears poised to test the 15,000 line.

Buying interest remains focused on low- and medium-priced stocks, reflecting the quantitative monetary easing by the Bank of Japan.

Following the release of corporate earnings reports for fiscal 2000 in May, buying will spread to issues supported by favorable earnings prospects.

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