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Tokyo investors eye US data next week


Tokyo investors will keep a close eye on US economic data next week as analysts warn that the Japanese market's surge to a six-month high may be short-lived.


'The rally may not last long, but the market will be quick to react to any fresh incentives,' said Toshihiko Matsuno, strategist at SMBC Friend Securities, on Friday.


'The direction of trading next week will depend on US economic indicators.'


US inflation and housing data are among the figures due out next week.

On Friday, dealers said investor sentiment was boosted after US Federal


Reserve chair nominee Janet Yellen suggested the bank would not start reeling in its stimulus program until the economy was strong enough and unemployment was lower.


That sent Tokyo stocks surging 1.95 per cent to close at their highest level in six months, as a weaker yen helped boost the market with investors betting the US Fed will maintain its easy-money policy. The scheme has been credited with helping prop up global equity markets.


The benchmark Nikkei 225 index wrapped up Friday's session at 15,165.92, the best finish since hitting a five-year high in late May, with analysts saying Tokyo was back in bull-market territory.


The headline index gained 7.66 per cent over the week.


The Topix index of all first-section issues was up 1.68 per cent at 1,239.04, advancing 5.32 per cent on the week.


Friday marked a year since Shinzo Abe pledged as leader of the opposition to revive Japan's economy with unlimited monetary easing measures and huge government spending - a plan later dubbed


'Abenomics'. Within six weeks he was elected.


His promise sparked a plunge in the yen - with the unit losing about quarter of its value against the US dollar to date - and a stock market rally that has seen the Nikkei soar about 70 per cent since mid-November 2012.


Abe's growth blitz has helped push down the yen, giving a boost to exporters and stoking a huge rally in Japan's long-forgotten equity market.


'The market scenery has changed,' Matsuno said.


'Ms Yellen suggested the easy-money policy would continue to prop up the economy, which is theoretically a negative factor for the dollar,' he added.


But her comments boosted risk sentiment and pushed up stock prices, which prompted investors to jump back in the market, he said, adding that 'many market players moved for buy-backs'.


SMBC Nikko Securities general manager of equities Hiroichi Nishi added: 'It wouldn't be a total misnomer to call the current rally a 'Yellen Rally'.'


In currency trading, the US dollar topped Y100 for the first time since mid-September, changing hands at Y100.12 in late Tokyo trade, against Y100.00 in New York on Thursday.


In share trading, major exporters were higher with Sony up 3.35 per cent at Y1,846 and Canon rising 1.89 per cent at Y3,230.

Sony was also lifted by upbeat expectations for its new PlayStation 4 games console, which will go on sale in North America on Friday.


Financial stocks also rose after reporting robust earnings on Thursday.

Mitsubishi UFJ Financial Group, Japan's biggest bank, rose 2.01 per cent to Y658 while rival Mizuho gained 1.86 per cent to Y218.


Tokyo Electric Power climbed 1.45 per cent to Y556 after media reports that the operator of the crippled Fukushima nuclear power plant would get billions of dollars in fresh bank loans to help fund decommissioning the site and compensating victims.


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