RTRS: Nikkei hits 2-week closing high on hopes for BOJ steps
By Aiko Hayashi
TOKYO (Reuters) - Japan's Nikkei average rose more than 2 percent to a two-week closing high on Tuesday after the Bank of Japan said it would hold an extraordinary policy meeting, sparking speculation it might take steps to support the economy.
Japan's central bank called an emergency policy meeting as the finance minister piled more pressure on the central bank to support the economy, saying he was open to a return to quantitative easing.
The BOJ was set to start the meeting at 0500 GMT (12 a.m. EST)and the central bank governor, Masaaki Shirakawa, will hold a news conference from 0730 GMT (2:30 a.m. EST).
"Hopes that the BOJ will come up with some sort of measures are lifting the market. If the central bank were to engage in quantitative easing, that would be a measure against deflation," said Soichiro Monji, chief strategist at Daiwa SB Investments.
"But few people actually believe that alone could solve the deflation problem. The fact that the BOJ and the government are showing a sense of emergency about falls in the stock market seems like positive enough news for investors for now."
Exporters such as Honda Motor (7267.T: Quote, Profile, Research, Stock Buzz) recovered ground to help boost the market, while Shionogi & Co (4507.T: Quote, Profile, Research, Stock Buzz) jumped after the Nikkei business daily said health authorities had granted it a priority review for its flu drug.
The benchmark Nikkei .N225 climbed 2.4 percent to 9,572.20, its highest close since November 18, while the broader Topix .TOPX gained 2.1 percent to 857.76.
Trade was active on the Tokyo exchange's first section, with 2.7 billion shares changing hands, above last week's daily average of 2 billion and marking the highest level since early September.
The BOJ's announcement of a meeting came just after the Nikkei had finished morning trade down 1 percent, as a short-covering bounce on fading Dubai worries the previous day ran out of steam.
"The sense is that the BOJ wants something concrete in hand when the BOJ governor meets (Prime Minister Yukio) Hatoyama later this week," said Nagayuki Yamagishi, strategist, Mitsubishi UFJ Securities.
"But there's also the view that deciding anything in such a rush may not be a good idea. And there's the danger that markets might have anticipated some extraordinary move and then if they just announce something ordinary, that markets could fall out of disappointment."
EXPORTERS UP, SHIPPERS SINK
Shares of some exporters reversed course in the afternoon, with Honda jumping 3.9 percent to 2,805 yen and Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) adding 2.3 percent to 3,520 yen. Industrial robot marker Fanuc Ltd (6954.T: Quote, Profile, Research, Stock Buzz) gained 2 percent to 7,280 yen.
Banks also advanced, with Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), Japan's top bank, rising 3.1 percent to 497 yen. No.2 Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) gained 1.9 percent to 165 yen.
Shionogi shares climbed 3 percent to 1,918 yen after the Nikkei business daily said that a review of the peramivir influenza treatment, which Shionogi bought Japan rights to from BioCryst Pharmaceutical (BCRX.O: Quote, Profile, Research, Stock Buzz), would be fast tracked.
Unlike Tamiflu or Relenza, peramivir can be administered intravenously, making it useful in treating severe cases.
GS Yuasa Corp (6674.T: Quote, Profile, Research, Stock Buzz) surged 7.2 percent to 652 yen after Goldman Sachs lifted its rating on the car battery maker to "neutral" from "sell," saying the stock no longer looks overvalued after a recent share price decline.
Toshiba Corp (6502.T: Quote, Profile, Research, Stock Buzz) rose 3.3 percent to 473 yen after nuclear reactor maker Areva (CEPFi.PA: Quote, Profile, Research, Stock Buzz) said it will hold exclusive talks to sell its transmission and distribution unit to a French consortium, turning down an offer from Toshiba.
Toshiba shares had been under pressure in the past month amid fears that it might have to tap equity markets again to top the winning 4.1 billion euro offer by Alstom and Schneider.
But shares of shipping firms fell after the Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities, fell to over a two-week low on Monday with slower cargo activity and weaker sentiment taking their toll.
Nippon Yusen KK (9101.T: Quote, Profile, Research, Stock Buzz) lost 3 percent to 261 yen and Mitsui O.S.K. Lines Ltd (9104.T: Quote, Profile, Research, Stock Buzz) dipped 0.2 percent to 482 yen.
