Japanese stocks: Weaker yen boost for exporters

TOKYO - Japan's Nikkei share average rose 1.1 per cent by yesterday's close as exporters such as Honda Motor gained on a weaker yen, and upbeat broker reports boosted companies including plant engineering firm JGC Corp.

Mizuho Financial Group, Japan's biggest banking group, reversed a morning fall after it posted an earnings outlook that beat analysts' expectations.

"More buyers returned to the market in the afternoon after seeing Mizuho's results," said Koichi Seki, an equity manager at Chuo Securities.

"It seems foreign players have also started scooping up big-tech issues like Sony following the Nasdaq's continued gains."

The Nikkei closed up 121.36 points at 11,158.65.

Seki said the weaker yen was helping the market so far but investors should watch out for any signs of rapid strengthening in the US dollar.

A weaker yen is generally considered positive for Japanese exporters as it inflates the value of overseas sales. But it could also sap interest in Japanese shares among foreign investors as a weak yen erodes their returns in US dollar terms.

Honda, which generates more than three-quarters of its sales overseas, rose 1.7 per cent to 5320, its highest close since April 15. Nissan Motor gained 1.1 per cent to 1072.

Sony Corp climbed 2.2 per cent to 4120 and Matsushita Electric Industrial Co jumped 2.6 per cent to a 13-month closing high of 1649 after the Nasdaq eked out its sixth gain in a row on Friday, its best winning streak in six months.

The Nikkei, which had a seven-day losing streak up to last Tuesday, when it hit a five-month closing low, has since gained 333 points or 3 per cent.

- REUTERS