News Column

Nikkei rises to 5-month high in morning on recovery hopes

June 19, 2014



The Nikkei stock index rose slightly to an almost five-month high Friday morning in Tokyo, lifted by buying on prospects of a global economic recovery due to the resilience of U.S. stocks overnight.

The 225-issue Nikkei Stock Average gained 48.44 points, or 0.32 percent, from Thursday to 15,409.60, its highest since late January on an intraday basis. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 2.35 points, or 0.19 percent, to 1,271.39.

Stocks fluctuated mostly higher in the morning, as selling to lock in gains following a three-day winning streak were offset by buying on hopes for a global economic recovery after the Dow Jones Industrial Average extended gains for the fifth straight session, brokers said.

Japanese stocks were also supported by improved market sentiment due to strength in the domestic economy despite the April 1 consumption tax hike as well as hopes for structural reforms by the government, they said.

But the pace of the rise in Japanese stocks has been slowed, as a relatively firm yen versus the dollar below the 102 yen line has capped their gain, Yutaka Miura, a senior technical analyst at Mizuho Securities Co., said.

"For stocks to gain further ground, there needs to be additional factors such as more increases in U.S. stocks and a weakening yen, with the dollar rising above the 102 yen line to move close to the 103 yen level," Miura said.

Real estate, nonferrous metals and construction shares were major gainers, while oil and coal products, mining and retail issues were main decliners.

On the First Section, declining issues advancing ones 955 to 677, while 180 finished the morning unchanged.

Takeda Pharmaceutical lost 21 yen, or 0.4 percent, to 4,855 yen after announcing Thursday it has voluntarily decided to end the development program for medicine called orteronel, or TAK-700, for prostate cancer after conducting clinical testing.

Panasonic rose 21 yen, or 1.7 percent, to 1,259 yen following a news report that it is downsizing its research and development division and shifting half of the staff to business divisions such as automotive and housing as part of a broader structural reorganization.



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Source: Japan Economic Newswire


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