TOKYO: Japan's Nikkei share average is likely to open higher and may test a fresh multi year-high on Tuesday on ongoing optimism about the outlook for growth on the back of central bank and government efforts to revive the economy.
Market players said the Nikkei was likely to trade between 13,500 to 13,700 on Tuesday. Nikkei futures in Chicago <0#NIY:> closed at 13,595, up 0.3 percent from the close in Osaka of 13,560.
Wall Street's gains overnight should also underpin sentiment, they said.
"Once the Nikkei tops 13,600, there will be some profit-taking, so the benchmark is likely to hover around that level," said Yutaka Miura, a senior technical analyst at Mizuho Securities. "Investors will keep monitoring the currency market all day."
The benchmark Nikkei climbed 1.9 percent on Monday to close at 13,568.37, its highest closing level since July 2008, while the broader Topix advanced 1.7 percent to 1,145.60.
The yen gained against the dollar on Monday but remained within sight of the key 100-yen level after the Group of 20 leading economies refrained from criticising Japan's massive monetary easing program, which has significantly weakened its currency.
The yen weakened as low as 99.89 yen on Monday, according to EBS trading platform. The Japanese currency was last traded at 99.35 to the dollar. Many traders expect the yen's downtrend to persist due to the Bank of Japan's sweeping monetary expansion programme unveiled earlier this month.
Government and central bank efforts to revive the economy and end nearly two decades of stagnation have lured investors back into Japanese equities in recent months.
The benchmark Nikkei has rallied 57 percent and the yen has weakened 22 percent against the dollar since mid-November, when Shinzo Abe, who became Prime Minister in December, promised bold monetary and fiscal expansionary policies during his election campaign.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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