Nikkei hits five-week closing high, Mitsubishi Motors surges
Friday, 4 December 2009
TOKYO, Dec 3 (Reuters): Japan's Nikkei average climbed nearly four per cent Thursday to hit its highest close in five weeks as exporters such as Canon Inc jumped on a weaker yen, while metal shares climbed after gold hit a new record.
Mitsubishi Motors Corp soared 13.5 per cent after the Nikkei business daily reported that PSA Peugeot Citroen is in talks to spend up to 300 billion yen ($3.4 billion) to acquire a 30-50 per cent stake.
Mitsubishi Motors and Peugeot confirmed they were discussing an expansion of their existing partnership that could end in a capital tie-up, underscoring the intensifying pressure to consolidate in the fiercely competitive auto industry.
Stocks of Mitsubishi Motors shareholders, such as trading house Mitsubishi Corp, also climbed.
Market players said the overall market likely received a boost from buying by foreign investors partly because they took heart from recent moves by the government and the Bank of Japan (BoJ) on the economy.
"Foreign investors are likely putting their money into the Japanese market as the least risky place after Dubai's debt problems revived worries about risk-taking and also after the BoJ unveiled financial measures," said Hajime Nakajima, deputy general manager at Cosmo Securities.
"But they are not really buying due to Japan's bright economic prospects ... The market is also in a position to attract foreign money this month after a decline in the weighting of Japanese stocks in global allocations of their portfolios."
But many noted gains still seem to be due to short-covering and that it was still far too early to say if this was the start of a trend.
Dubai threw global markets into a tailspin last week on news that two of its leading companies would ask creditors to agree to a standstill on billions of dollars of debt as a first step to restructuring, though worries have receded.
In active trade, the benchmark Nikkei jumped 3.8 per cent to 9,977.67, its highest finish since October 30 and well above its 25-day moving average around 9,700.
The broader Topix gained 3.4 per cent to 888.04.
The BOJ said Tuesday it would offer around 10 trillion yen ($114 billion) in three-month funds at 0.1 per cent and keep its key interest rate steady at 0.1 per cent.
The central bank had surprised investors by calling an emergency policy meeting in the face of government pressure to do more to beat deflation.
Mitsubishi Motors Corp soared 13.5 per cent after the Nikkei business daily reported that PSA Peugeot Citroen is in talks to spend up to 300 billion yen ($3.4 billion) to acquire a 30-50 per cent stake.
Mitsubishi Motors and Peugeot confirmed they were discussing an expansion of their existing partnership that could end in a capital tie-up, underscoring the intensifying pressure to consolidate in the fiercely competitive auto industry.
Stocks of Mitsubishi Motors shareholders, such as trading house Mitsubishi Corp, also climbed.
Market players said the overall market likely received a boost from buying by foreign investors partly because they took heart from recent moves by the government and the Bank of Japan (BoJ) on the economy.
"Foreign investors are likely putting their money into the Japanese market as the least risky place after Dubai's debt problems revived worries about risk-taking and also after the BoJ unveiled financial measures," said Hajime Nakajima, deputy general manager at Cosmo Securities.
"But they are not really buying due to Japan's bright economic prospects ... The market is also in a position to attract foreign money this month after a decline in the weighting of Japanese stocks in global allocations of their portfolios."
But many noted gains still seem to be due to short-covering and that it was still far too early to say if this was the start of a trend.
Dubai threw global markets into a tailspin last week on news that two of its leading companies would ask creditors to agree to a standstill on billions of dollars of debt as a first step to restructuring, though worries have receded.
In active trade, the benchmark Nikkei jumped 3.8 per cent to 9,977.67, its highest finish since October 30 and well above its 25-day moving average around 9,700.
The broader Topix gained 3.4 per cent to 888.04.
The BOJ said Tuesday it would offer around 10 trillion yen ($114 billion) in three-month funds at 0.1 per cent and keep its key interest rate steady at 0.1 per cent.
The central bank had surprised investors by calling an emergency policy meeting in the face of government pressure to do more to beat deflation.