Tokyo stocks surged to a fresh 15-year high Friday with buying from Japan's massive public pension fund lifting the market, while loose monetary policy globally continues to buoy investor spirits. Receding fears over the Greek financial crisis and expectations that the US Federal Reserve will hold off on an interest rate hike for now helped drive up Wall Street in the past week, giving a strong lead to the Japanese market.
Analysts say Tokyo could have some more upside as the Nikkei marches toward the 20,000 level with the country's pension fund - the world's largest - shifting more of its bond-heavy portfolio into stocks at home and abroad. But they also caution technical indicators suggest the Japanese market is overheating.
The Nikkei 225 index at the Tokyo Stock Exchange ticked up 0.06 percent, or 12.15 points, on Friday to end at 18,797.94, its highest close since April 2000. The benchmark index tacked on 2.54 percent over the week. The Topix index of all first-section issues advanced 0.14 percent, or 2.17 points, to close at 1,523.85. It rose 1.57 percent over the past week.
Investors breathed a collective sigh of relief after eurozone ministers this week signed off on a Greek reform package critical to extending its bailout and avoiding a disastrous default. Players also welcomed Federal Reserve chair Janet Yellen's cautious position about raising interest rates during two days of US Congressional testimony. Next week, investors will be looking to a barrage of US indicators, including manufacturing and consumption figures, as well as a European Central Bank.
policy meeting
"Considering the high likelihood of continued buying by the public pension fund, the Nikkei could approach 20,000," Daiwa Securities said in a note. On forex markets, the dollar slipped back to 119.24 yen in Asia Friday, down from 119.42 yen in New York but still up from 118.97 yen in Tokyo earlier Thursday. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates repatriated overseas profits.
In share trading, Yamaha rose 1.96 percent to 2,972 yen on Friday after the motorcycle giant announced that it will join the four-wheel market by launching small cars in Europe as early as 2019. Sony climbed 2.03 percent to 3,414.5 yen, while Uniqlo clothing chain operator Fast Retailing rose 0.74 percent to 46,330.0 yen.
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