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Published: Thursday November 15, 2012 MYT 3:47:00 PM
TOKYO: The Nikkei average closed at a one-week peak on Thursday in high volume as Japan's main opposition leader's comments to urge further easing and to defend public works spending lifted exporters and contractors.
But Sony Corp tumbled 8.9 percent after the consumer electronics maker said it would raise $1.9 billion through a sale of convertible bonds, a third of which would be used for investment in scandal-hit Olympus Corp. It was the most traded stock on the main board by turnover.
Comments by Shinzo Abe, who is expected to win next month's election, pushed the yen to a 6-1/2-month low against the dollar at 80.83, a boost for Japanese exporters who gain when returning overseas earnings to Japan and lifting their future competitiveness.
The Nikkei gained 1.9 percent to 8,829.72, hitting a one-week high. It was the biggest percentage gain in a month. The broader Topix index climbed 2.1 percent to 737.51.
"The stock market cheers Abe's comment indicating further easing, and is inviting buying," said Chisato Haganuma, chief strategist at Mitsubishi UFJ Securities.
"The stock market is not a fan of uncertainty, and by this comment, investors finally get the feeling that there is more clarity in this country's political climate."
Abe, a former prime minister and head of the Liberal Democratic Party (LDP), said he wants the Bank of Japan to adopt interest rates of zero or below zero to enhance lending and reiterated that he would call on Japan's central bank to ease monetary policy aggressively to end nagging deflation and weaken the yen.
Exporters as well as contractors led the gains as Abe also defended public works spending, which was a hallmark of his party's policies in more than half a century of nearly non-stop rule.
Among the exporters rallying were Toyota Motor Corp , Honda Motor Co, Canon Inc and TDK Corp, up between 4.6 and 5.1 percent.
For contractors, Kajima Corp, Taisei Corp and Obayashi Corp all rose more than 6 percent.
"People reacted to a trading cue coming from the domestic market, and they had been missing that for a while," said Naoki Fujiwara, a fund manager at Shinkin Asset Management. "But the rallies may be short-lived as there are still worries about economies in the U.S. and Europe."
Comments by U.S. President Barack Obama that he won't sign off on more tax cuts for the wealthy, and unyielding remarks from Republican leaders earlier this week, signal a long period of negotiation and brinkmanship that could leave a cloud of uncertainty over the economy.
Worries over the so called "fiscal cliff" in the United States have been weighing on global equities, including Japanese stocks, with the Nikkei falling for seven sessions in a row from Nov. 5 to 13.
Trading volume on the Topix hit a two-month high, with 2.2 billion shares changing hands.
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