Japan's Nikkei stock average jumped 1.9 percent to close at its highest level since the March 11 earthquake, with short-covering encouraged by an outperform rating for beleaguered Tokyo Electric and a government plan to avoid rolling power blackouts. Commodity trading advisers in the Nikkei futures market helped lead the short-covering while gains in commodity prices and further declines in the yen against the euro also bolstering sentiment, traders said.
"There is no clear way you can explain today's rally. TEPCO shares' sharp gains, the government's plan to avoid rolling blackouts and the yen's weakness are all positive factors, but again, you really can't pinpoint the exact factor," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
The benchmark Nikkei closed up 1.9 percent or 177.15 points at 9,768.08, its highest close since March 11 and the biggest percentage gain for a single day since March 30. The broader Topix ended up 1.4 percent or 12.03 points at 853.13. Shares of Tokyo Electric, jumped by one-fourth on Friday after Mizuho Securities reiterated its "outperform" rating on the operator of a crippled nuclear plant and set a target price more than double the current level.
Mizuho said in a note to clients that it had set its target price at 900 yen, set roughly equal to its forecast for book value per share at the end of the current financial year in March 2012. Tokyo Electric shares, which tumble more than 80 percent since the quake, surged by the daily 80-yen limit, or 24 percent higher, to finish at 420 yen.