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Nikkei higher on banking results

Tuesday, January 29 07:31:35

The Nikkei share average edged up today as investors welcomed a newspaper report that major banks were likely to have significantly larger profits this year, while small caps such as bio chemical stocks attracted retail investors.

Investors have been piling into the Japanese market in the hope that "Abenomics", Prime Minister Shinzo Abe's brand of economic policy involving aggressive monetary easing and a weaker yen, will boost exporters, financials and real estate.

Sumitomo Mitsui Financial Group (SMFG), Mizuho Financial Group and Mitsubishi UFJ Financial Group (MUFG) rose between 2.9 and 4.4 percent after the Nikkei newspaper said the recent stock rally would boost the value of banks' own shareholdings and their net profit in the current fiscal year.

The banks were three of the four most-traded stocks by turnover on the main board.

"Everyone has been speculating on who will benefit from Abenomics, and banks were one of the candidates. Hearing that they will actually see those benefits is a big positive for the market," said Tetsuro Ii, chief executive of Commons Asset Management.

The Nikkei rose 0.4 percent to close at 10,866.72, or 1.2 percent below a 32-month high of 11,002.86 reached on Monday. ( C) Reuters