Japan's Nikkei average climbed above the 9,000 mark for the first time in three months on Wednesday, boosted by a stronger-than-expected profit outlook from Toyota Motor Corp and short-covering in index options. A trader said investors who had been bearish on the Nikkei, were forced to cover their short positions in February call options at 9,000 as the benchmark advanced to that level, spurring further gains in the Nikkei in the afternoon.
The Nikkei closed 1.1 percent higher at 9,015.59, not too far from its 200-day moving average near 9,063, and the broader Topix gained 1.2 percent to 782.34, shrugging off worries about Greece whose politicians delayed a decision yet again on unpopular terms of a crucial 130 billion euro bailout. Trading volume on the main board hit a three-week high, with 2.48 billion shares changing hands.
"Core blue chips firms are steadily lifting the index higher...Banks are very steady too, so it is a departure from how markets had been acting until recently," said Hideyuki Ishiguro, a strategist at Okasan Securities. Toyota, Japan's top carmaker, jumped 5 percent to a six-month high in heavy volume after it lifted annual profit guidance by more than a third, citing cost cuts and expected benefits from Japanese government schemes.
Rival automaker Nissan Motor Co was up 2.4 percent ahead of its earnings report. Renesas soared 10.1 percent, Fujitsu bounced 2.9 percent and Panasonic was up 3.3 percent, while Elpida Memory surged 9.4 percent on a report that it could be selling its Hiroshima plant as part of the deal.
Other strong performers included Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group and Mizuho Financial Group, recovering further from last year's battering as the US economic outlook brightens. The three banks climbed between 1.6 and 2.6 percent. Technical indictors showed the stocks could be ripe for a correction as they were trading deep in "overbought" territory, with their 14-day relative strength indexes well above 75, however. Seventy and above is considered overbought.
The Topix 500 has risen 7.3 percent this year, boosted by improving US economic data. With the gains, the Topix 500 carries a 12-month forward price-to-book ratio of 0.9, up from 0.84 earlier this year, and the proportion of companies trading below their net asset value has dropped to 55 percent from nearly 60 percent at the start of the year, data from Thomson Reuters Datastream showed.
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