Nikkei scales 21-month high on new leadership hopes

PUBLISHED : Thursday, 27 December, 2012, 2:43pm
UPDATED : Thursday, 27 December, 2012, 2:43pm

The Nikkei share average climbed to a 21-month high on Thursday, led by exporters and banks, as the new Japanese prime minister’s vow to battle deflation and a strong currency buoyed investor risk appetite.

The Nikkei added 0.91 per cent, or 92.62 points, to 10,322.98 by the close, finishing above 10,254.43, its level on March 11, last year when a massive temblor hit Japan, sparking a tsunami and subsequent nuclear crisis.

Tokyo’s benchmark closed at its highest level since the quake-tsunami disaster in March last year, a day after Japan’s new conservative government took power.

The broader Topix index of all first-section shares was up 0.75 per cent, or 6.38 points, at 854.09.

“Some say the market is now overbought, but the trend is your friend, and few are willing to risk going short at the moment,” said an equity trading director at a foreign brokerage.

“Japan is now right in the middle of the radar for foreign portfolio managers.”

In forex trade, the dollar rose to its highest level in more than two years against the yen as Shinzo Abe was sworn in as prime minister.

Abe – whose Liberal Democratic Party won a landslide election victory this month – has repeatedly said he would pressure the Bank of Japan for more easing measures, comments that have helped bring down the value of the yen.