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Nikkei rises again on Fed comments

Thursday, March 21 07:14:35

Japan's Nikkei average climbed to a fresh 4-1/2 year high today as financials and exporters gained on the news of the U.S. Federal Reserve's pledge to maintain stimulus and hopes of more monetary easing by the Bank of Japan's new leadership.

The benchmark Nikkei finished 1.3 percent higher at 12,635.69, its highest closing level since early September 2008.

On Wednesday, Haruhiko Kuroda, an advocate of aggressive easing, took the central bank's helm along with deputies Kikuo Iwata and Hiroshi Nakaso.

"The market expects easing at its first meeting (on April 3-4) under the new leadership, so until then, the market should stay strong," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities.

Market players said sentiment among Japanese retail investors was unusually bullish after they have pocketed huge gains on the recent rally in Japanese shares.

"Everybody seems to be making money ... when sentiment is so strong and they have big risk capacity, negative news will hardly dent the market and only offers good buying opportunities," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.

Data from a brokerage specialising in retail investors showed margin traders' positions have unrealised gains for 13 straight trading days. Normally they have unrealised losses as they tend to hesitate to cut losses.

"This market is so different from usual patterns that there's no point making bets, based on various events on calendar or on the news," Sakuma said.

The Nikkei has gained 21.6 percent this year on widely-expected policy easing after Prime Minister Shinzo Abe's campaign to pull the country out of persistent deflation and bolster growth.

The yen has weakened 10.5 percent during the same period, boosting hopes that exporters' overseas earnings will rise when repatriated. ( C) Reuters