Nikkei hits seven-week high

The Nikkei share average climbed to a seven-week high on Friday but low trading volume and the index's failure to decisively rise above its 200-day average suggested investors are not convinced it will break from its post-quake range anytime soon. Easing worries over the eurozone debt crisis, an unexpectedly strong reading in the US regional manufacturing data and hopes of a recovery in Japanese corporate earnings from the earthquake underpinned the market.
But low volume pointed to limited investor appetite for stocks and many market players say selling pressure could increase above 9,850, the average for March, and hence the level at which many investors valued their holdings at the last book-closing.
"There is no leader in the market at the moment and the rally is essentially a reversal after sharp falls, which is symbolised by the fact that power companies were the best performers last month," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. The benchmark Nikkei closed up 0.5 percent at 9,868.07, just a hair above its 200-day moving average of 9,866. The broader Topix also rose 0.5 percent, to 853.86.
Shares of industrial robot maker Fanuc gained 5.5 percent 14,110 yen, blasting to an 11-year high, after the company announced strong orders this week. That alone accounted for more than half of the Nikkei's gains. Trading volume was 1.67 billion shares, about 10 percent below the average of last month, which saw the lowest monthly average volume so far this year.
"Because institutional investors weren't active ahead of the quarter-end, there was limited selling. This week's move seemed like a fluffy rally. You should take it with a gain of salt," said Tetsuro Ii, the president of Common Asset Management.
On the week, the Nikkei rose 2 percent. Industry leader Rinnai rose 1.6 percent to 5,890 yen, having hit a record high at one stage. Second-ranked Noritz jumped 6.4 percent to 1,572 yen after it revised up its earning forecast on Thursday. Optical glass-maker Hoya jumped 4 percent to 1,845 yen on news it will sell its Pentax camera business to copier and printer maker Ricoh. Ricoh fell 0.2 percent to 887 yen.