Reuters: Market News: Nikkei marks 8-1/2 mth high after Bernanke comments

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Nikkei marks 8-1/2 mth high after Bernanke comments Mar 27th 2012, 03:24 Mon Mar 26, 2012 11:24pm EDT * Blue-chip buying pushes index higher * Futures buying to lead Nikkei higher this week - Nomura * Next Nikkei upside target at 10,207, July 8 intraday high * Sumitomo Metal surges 7 pct, confirms Alaska gold mine * Megabanks rise, Gree sheds 3 pct By Mari Saito TOKYO, March 27 (Reuters) - Japan's Nikkei index climbed 1.8 percent and hit its highest in more than eight months on Tuesday after U.S. Federal Reserve Chairman Ben Bernanke signaled that supportive policy may continue, encouraging investors to return to risk assets. Blue-chips bounced back from a recent correction in Tokyo markets, with Honda Motor Co up 2.9 percent, Canon Inc jumping 2.7 percent and investment bank Nomura Holdings rallying 3 percent. By the midday break, the benchmark Nikkei advanced 175.19 points to 10,193.43 after jumping as high as 10,203.97, its highest level since early July, in busy morning trade. The index lost 1.2 percent last week and eked out modest gains on Monday. The broader Topix index rose 1.8 percent to 866.76. Market participants said the next upside target was the July 8 intraday high of 10,207.91. "The 10,200 level is an important milestone and if we overtake the July high, we are looking at levels seen before last year's earthquake," said Masayuki Otani, chief market analyst at Japan Securities. "Month-end buying for window-dressing could push the index higher this week, but I'm not sure it can continue to test the upside without other major factors," Otani said. The Nikkei has surged more than 20 percent so far this year on a run of robust U.S. economic data and easing programmes by global central banks. And just as the global rally looked to have run out of steam, comments from the Fed's Bernanke on Monday reinforced the view that further easing from the central bank may be possible. The S&P 500 index regained a four-year high overnight and the Dow and the Nasdaq both ended up more than 1 percent. Morning trading volume was moderate, with the Topix at 55.3 percent of its daily 90-day average volume. AIMING HIGHER Sumitomo Metal Mining Co surged 7 percent and boosted the nonferrous metals sector to the top of the main board after it said it had confirmed a new gold deposit containing 40 tonnes at its mine in Alaska. Japan's megabanks also rose, with Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group up between 2.1 and 2.8 percent. Jun Yunoki, equity strategy analyst at Nomura, said futures buying will continue to push the index higher this week as domestic passive funds are expected to buy in order to reinvest dividends. "There is certainly an impression that the Nikkei may climb even higher in the afternoon trading session ... If we take pre-disaster (pre-March 11, 2011) foreign buying as neutral weight, we are not closing in yet on that amount of buying," said Yunoki. "I think foreign buying will continue as they are still slightly underweight in Japanese equities," he said. Japanese equities were also still considered undervalued compared with their global counterparts. The Topix carries a 12-month forward price-to-book ratio of 0.98 compared with the S&P 500's 2.0 and STOXX Europe 600's 1.4, Thomson Reuters Datastream data showed. Bucking the overall market trend was Gree Inc, which shed 3.1 percent and topped the main board as the most heavily traded share by turnover, extending the previous day's sharp loss after a magazine report cited a government official as saying an investigation could begin in April or May over additional charges for special items in its games. Link this Share this Digg this Email Reprints

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