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Nikkei hits 8-mth high as US data cheers; Resona soars

Published 01/06/2011, 02:18 AM
Updated 01/06/2011, 02:20 AM
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* US private-jobs data boosts dollar, adds to recovery signs

* Resona soars on speculation capital raising near

* Trading volume nearly double last week's average

* Dollar/yen reaction to Friday's US payrolls data in focus

By Ayai Tomisawa and Antoni Slodkowski

TOKYO, Jan 6 (Reuters) - Japan's Nikkei climbed to an eight-month high on Thursday after the dollar jumped against the yen following robust U.S. private-sector jobs data, while Resona surged 14 percent on speculation it would soon launch a planned share sale.

Shares of blue-chip exporters rose, with Toyota Motor Corp gaining 2.6 percent and Hitachi Ltd rising 2 percent, leading the Nikkei's advance after the greenback posted its best one-day gain in more than three months against the yen on Wednesday.

Trading volume picked up sharply as more investors tap into riskier assets on hopes of economic recovery. Around 2.4 billion shares changed hands on the Tokyo Stock Exchange's first section, well above last week's average of around 1.3 billion.

Advancing issues outpaced declining ones by 1,250 to 302.

"If the weakening yen trend continues, there will likely be continuous buying in Japan stocks in the midterm," said Hidenori Suezawa, chief strategist at Nikko Cordial Securities.

The benchmark Nikkei gained 1.4 percent, or 148.99 points, to 10,529.76. That was the highest level since its May 14 peak of 10,551.69, which now becomes its next target.

The broader Topix index gained 1.4 percent to 924.51.

The Nikkei breached the psychologically important barrier of 10,500 yen after the ADP Employer Services report showed U.S. private employers added 297,000 jobs in December, the largest ever gain, adding to evidence the U.S. economy is on a recovery path.

The jobs figures come two days ahead of the U.S. government's closely watched and more comprehensive payrolls report for December, prompting economists to raise forecasts for that data.

"Markets will now wait for U.S. payrolls on Friday for confirmation of the strong trend. But investors will then focus more on how the U.S. data will impact the dollar/yen rate," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"Investors have already taken in stride positive news from the U.S. and will now look for new trading factors. After Friday they will immediately shift their focus to the performance of U.S. companies as the earnings season starts next week."

RESONA SURGES

Resona Holdings jumped 14 percent to 545 yen in heavy trade as investors scrambled to cover short positions on speculation the bank would soon make a final decision to go ahead with its planned capital raising.

Japan's No.4 bank registered in November to sell up to 600 billion yen ($7.2 billion) worth of new shares to repay government bailout funds, but it has not yet made a decision on the timing, size and other details.

The stock was the biggest gainer on the Nikkei and the most actively traded by turnover on the Tokyo Stock Exchange's main board, trading five times last month's average volume.

Fuji Heavy Industries, the maker of Subaru vehicles, surged 4.1 percent to 685 yen after Goldman Sachs hiked its rating to "buy" from "neutral" and added the stock to its "conviction buy list".

The brokerage said in a report that Fuji's October-December quarter earnings will likely prompt the company to raise its full-year outlook for the fiscal year ending in March.

But Fast Retailing plunged 5.1 percent to 12,400 yen after the firm said on Wednesday that same-store sales at its Uniqlo clothing chain in Japan dropped 15.5 percent in December, marking the fifth straight month of year-on-year declines. (Editing by Chris Gallagher)

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