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Nikkei rises as Japan leadership vote awaited

Published 08/29/2011, 12:31 AM
Updated 08/29/2011, 12:40 AM
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* DPJ election results awaited

* Market wary after Fed gives no clear direction on easing

* Shippers up on Nomura's bullish coverage

By Lisa Twaronite

TOKYO, Aug 29 (Reuters) - The Nikkei benchmark climbed on Monday as rising U.S. futures pushed up most markets across the region, with investors continuing to watch for the outcome of Japan's ruling party vote for the country's next prime minister.

"Futures players may be behind the Nikkei's rise," said Hiroyuki Fukunaga, chief executive of Investrust.

Futures for the Dow Jones Industrial Average were up 54 points at 11,371.

Aozora Bank jumped 6 percent after the Australian Financial Review said that the Australia and New Zealand Banking Group is looking at buying either Aozora or Tokyo Star Bank.

Fukunaga added that profit-taking was possible after the results of the ruling part election are announced around 1:10 p.m. (0410 GMT).

Five lawmakers, including fiscal conservative Finance Minister Yoshihiko Noda, Trade Minister Banri Kaieda and former foreign minister Seiji Maehara, registered on Saturday to run in the party vote. The winner will become Japan's sixth prime minister in five years because of the Democratic Party's majority in parliament's lower house.

The benchmark Nikkei rose 1.4 percent to 8,819.15, while the broader Topix index climbed 1.2 percent to 764.74.

Traders were also awaiting Friday's U.S. jobs data to gauge the strength of the U.S. economy, after Federal Reserve Chairman Ben Bernanke didn't offer any clear signals on further U.S. monetary easing

"The market may stay directionless this week as Bernanke has not given a clear indication of what the Fed will do to counter economic worries," said Tsuyoshi Kawata, a senior strategist at SMBC Nikko Securities.

Bernanke said the Fed had marked down its outlook for U.S. economic growth and announced it would extend its September policy meeting to two days to consider its options. But he said the onus for boosting long-term growth prospects lay at the feet of the White House and the U.S. Congress.

Currency movements remained in focus, with the dollar trading below 77 yen , pressuring exporters.

Shippers were higher, with Mitsui OSK rising 3.8 percent to 329 yen and Nippon Yusen gaining 3.6 percent to 231 yen after Nomura Securities restarted coverage of the sector at "bullish" and restarted the two companies with a "buy" rating, saying tight demand in iron ore and coal will likely lift their prices in the coming years. (Additional reporting by Ayai Tomisawa; Editing by Joseph Radford)

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