JAPAN - Japanese shares jumped nearly four percent to a five-week high Thursday, supported by big gains in exporters as the yen retreated from a 14-year high.
The benchmark Nikkei 225 stock average climbed 368.73 points, or 3.8 percent, to 9,977.67, the highest close since October 30. The market rose for a fourth consecutive day. The broader Topix increased 3.4 percent to 888.04.
"Investors cheered a continued slide in the yen and stepped up buying of exporters," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.
The Japanese currency hit a 14-year high against the dollar Friday, causing investors to dump shares in exporters. A strong yen pressures Japanese exporters as it erodes their overseas profits.
But the yen fell after the Bank of Japan announced Tuesday it would pump up to one trillion yen ($11.4 billion) into the short-term money market as Japan's economy battles a strong yen and deflation. Since then, the yen continued its slide.
Sentiment was also upbeat on a report by the Nikkei business daily that French carmaker PSA Peugeot Citroen is in final talks with Mitsubishi Motors Corp. to buy a 30 to 50 percent stake in Japan's No. 4 automaker.
The report "shows Japan remains attractive to foreign investors," Takahashi said.
Mitsubishi declined to confirm the report. But its shares soared 13.4 percent to 135 yen. Earlier, Mitsubishi soared nearly 20 percent.
A tie-up could effectively put Mitsubishi under Peugeot Citroen's control, creating the world's sixth-largest automobile alliance, the paper said.
Investors were also hopeful that the size of an extra budget will be bigger than the 2.7 trillion yen initially earmarked.
Prime Minister Yukio Hatoyama's Cabinet is expected to unveil the budget Friday.
Among blue chips, Toyota Motor Corp. -- the world's No. 1 automaker -- rose 5.6 percent to 3,760 560 yen. Honda Motor Co. gained 4.2 percent to 2,985 yen.
Sony Corp. jumped 6.0 percent to 2,475 yen. Panasonic Corp. rose 5.8 percent to 1,223 yen.
Struggling Japan Airlines Corp. was unchanged at 92 yen even though American Airlines vowed Thursday to lead a $1.1 billion investment in the loss-making carrier to prevent it from falling into the orbit of rival Delta.
In currencies, the dollar rose to 87.85 yen in afternoon trade Thursday from 87.42 yen in New York late Wednesday. The euro rose to $1.5079 from $1.5045.
source: http://www.businessweek.com/
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