Tokyo stocks on track to extend rally
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TOKYO, Jan 25 AFP
January 25 2013, 8:04PM
Japanese shares have notched up another week of gains as a weaker yen and hopes for strong corporate earnings boosted the benchmark Nikkei 225 index, with dealers expecting more rises next week.
The Nikkei added 0.12 per cent, or 13.35 points, to end the week at 10,926.65, its highest close since April 2010. The Topix index of all first-section shares gained 0.62 per cent, or 5.65 points, at 917.09.
According to the Nikkei business daily, the benchmark index's 11-week rally has not been matched in more than four decades.
Tokyo wallowed in negative territory in the first three days of the week as a run of profit-taking weighed, while the Bank of Japan's latest policy moves, announced on Tuesday, failed to impress investors.
The central bank, under pressure from Japan's new government, adopted a two-per cent inflation target in a bid to tackle Japan's long-running deflation and announced an open-ended easing scheme to kick in from next year.
"A variety of factors are seen working together to push the yen lower, including more pressure on the central bank to stop deflation," said Chibagin Asset Management general manager Yoshihiro Okumura.
"Despite the disappointment following the BoJ's ... announcement, players are also hoping for a more concrete explanation of how it plans to achieve its two per cent inflation target."
The yen resumed its steep decline not long after the news, helping lift the market as exporter shares benefited.
Gloomy economic data on Thursday and Friday - Japan logged a record $78 billion trade deficit last year and consumer prices slipped for the fourth straight year in 2012 - failed to keep Tokyo stocks down. The Nikkei soared 2.88 per cent by Friday's close.
"The Nikkei is bound to break the 11,000 mark sooner or later, as market-friendly factors converge, including prospects and hopes for a still-weaker yen, a global economic rebound, and good earnings results from Japanese corporations," Toshiyuki Kanayama, market analyst at Monex, told Dow Jones Newswires.