Nikkei jumps to three-week high as weaker yen powers exporters

Reuters
Pedestrians are reflected on a stock quotation board displaying a graph of the movement of Japan's Nikkei average outside a brokerage in Tokyo August 28, 2013. REUTERS/Yuya Shino
.

View photo

Pedestrians are reflected on a stock quotation board displaying a graph of the movement of Japan's Nikkei average outside a brokerage in Tokyo August 28, 2013. REUTERS/Yuya Shino

By Tomo Uetake

TOKYO (Reuters) - The Nikkei average climbed nearly 3 percent to a three-week high on Tuesday morning, with blue-chip exporters leading the gains, after the yen weakened in the wake of upbeat factory data around the globe and a delay in a possible U.S. strike on Syria.

The benchmark Nikkei was up 2.8 percent at 13,955.14 in midmorning trade, adding to a 1.4 percent rise on Monday. The index is up 34 percent this year, but is down 13 percent since its May peak. The broader Topix gained 2.7 percent to 1,147.71.

"Right now, it looks like an event-packed September is panning out quite nicely," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo. He added that strong Japanese capital spending data and upbeat factory data from China and Europe had offset some of the recent concerns about emerging markets.

"Although the first few events have turned out to be OK, September is not over yet. It's still jam-packed with very pivotal events, such as FOMC and G20, and on the domestic front, Olympics and the consumption tax hike. These things all pose a particular risk."

Trade was fairly light on Tuesday morning, with volume on the Nikkei at 32 percent of its full daily average for the past 90 trading days. Analysts said activity was likely to stay relatively subdued as investors await key events including U.S. jobs data on Friday and the outcome of the Olympics bidding on Saturday.

Tokyo is competing against Istanbul and Madrid in the race to host the 2020 Summer Olympics, and a final decision is expected on September 7.

The Japanese currency fell to a one-month low of 99.55 yen against the dollar, giving a lift to export-oriented shares. Toyota Motor Corp , Nissan Motor Co Ltd and Panasonic Corp rose between 3.1 percent and 3.3 percent.

The yen is down 15 percent against the dollar this year, weighed down by the Bank of Japan's radical monetary stimulus launched in April to end years of stubborn deflation and foster growth.

Kansas Electric Power Co surged 8.4 percent to hit a two-week high on expectations that safety screenings to restart two nuclear reactors at its Oi nuclear plant will move forward, after the Nuclear Regulation Authority agreed that a geological fault under the plant was not active.

(Editing by Chris Gallagher)

View Comments (0)