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Nikkei hits 6-wk closing high on weak yen, U.S. jobs

Published 03/08/2010, 01:35 AM
Updated 03/08/2010, 01:40 AM
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* Nikkei at 6-wk closing high as U.S. jobs, weaker yen boost

* But Nikkei near overbought mark after 400 pt gain in 2 days

* Fujitsu falls in row over ex-president's exit

By Elaine Lies

TOKYO, March 8 (Reuters) - Japan's Nikkei average rose 2.1 percent to a six-week closing high on Monday, with exporters up on a weaker yen and resource shares lifted by rises in commodity prices, building on sentiment from better than expected U.S. jobs data.

Fujitsu Ltd, Japan's largest information technology services firm, fell 2.7 percent amid a dispute with former president Kuniaki Nozoe over the circumstances that led to his abrupt resignation last year.

U.S. non-farm payrolls shed 36,000 jobs in February compared with expectations in a Reuters poll for a loss of 50,000. Investors had been worried that severe winter weather would cause a larger drop.

Market players said that while the jobs figures were welcome, news reports that the Bank of Japan was examining a further easing of its ultra-loose monetary policy also played a key role in the market's jump by helping halt a rise in the yen.

"It's really almost more about the currencies now, especially with the dollar up over 90 yen," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"But we may start seeing a bit of profit-taking -- after all, the Nikkei has risen over 400 points in just two trading days."

The Nikkei business daily said on Friday that the Bank of Japan is examining a further easing of its ultra-loose monetary policy and may decide on such a move this month

The dollar rose 0.1 percent to 90.42 yen after earlier climbing as far as 90.69 yen on electronic trading platform EBS, its highest since Feb. 23.

Investors fret about a stronger yen as it eats into exporters' profits when repatriated.

The benchmark Nikkei rose 216.96 points to 10,585.92 its highest close since Jan. 22. The broader Topix gained 1.8 percent to 927.31 yen.

"Non-farm payrolls were better than expected, but not so much better that they'd provoke concerns about the U.S. hiking interest rates soon," said Hideyuki Ishiguro, a strategist at Okasan Securities.

"And last week's news that the Bank of Japan is looking into further easing of its monetary policy is helping too, by having weakened the yen for now."

But further rises may be limited for now, with the Nikkei's relative strength index (RSI) at 60. Anything above 70 is considered overbought territory.

FUJITSU FALLS, STEEL STRONG

Fujitsu fell to 568 yen after the Tokyo Stock Exchange said it was asking Fujitsu why it changed the reason it gave for Nozoe's resignation, announced in September after he had spent just 15 months in the top post.

The tussle between Nozoe and Fujitsu management threatens to disrupt the firm at a time it is pushing to cut deals and restructure to keep pace with global rivals in the computer services sector, and could invite scrutiny over its disclosure.

JFE Holdings Inc, the world's sixth-largest steelmaker, rose 3.6 percent to 3,570 yen after it said on Friday it had agreed with BHP Billiton to pay $200 per tonne for coking coal for April-June -- a 55 percent increase from the benchmark price for the business year to March 31.

The rise was in line with media and analysts' reports and the price is about a 10 percent discount from the current spot market price of about $220-$230 a tonne.

Nippon Steel Corp gained 2 percent to 350 yen. The world's second-biggest steelmaker declined to comment on whether it had struck a deal with BHP, the world's largest diversified miner.

Exporters climbed, with Canon Inc up 2.3 percent at 3,980 yen and Honda Motor Co rising 3.9 percent to 3,230 yen. Sony Corp rose 2.8 percent to 3,295 yen.

Commodities rose, with copper extending gains after rising 3 percent on Friday. Other metals gained as well.

Oil neared an eight-week high

Trading house Mitsubishi Corp advanced 2.6 percent to 2,346 yen and fellow trader Mitsui & Co gained 3.9 percent to 1,509 yen.

Trade picked up, with 1.9 billion shares traded on the Tokyo exchange's first section, the best in a nearly a month but still well below last year's daily average of 2.3 billion.

Advancing shares outnumbered declining ones by nearly 4 to 1. (Editing by Michael Watson)

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