Tokyo stocks jump nearly 4 percent on BOJ easing
Tuesday August 14, 3:36 am Eastern Time
TOKYO, August 14 (Reuters) - Tokyo's key Nikkei share average jumped nearly four percent on Tuesday for the biggest percentage gain since April, cheered by the central bank's surprise easing which prompted hefty gains in banks and heavy borrowers.
The benchmark Nikkei average shot up 3.84 percent or 440.39 points to 11,917.95, snapping a four-day losing streak that had sent it to a 16-year low in the previous session.
Mizuho Holdings , the world's largest bank by assets, fired up by its daily limit of 50,000 yen or 11.01 percent to 504,000, boosted by the Bank of Japan's (BOJ) announcement in the afternoon that it would raise current account deposits at the BOJ to six trillion yen ($49 billion) from five trillion.
The BOJ will also expand its monthly purchases of long-term Japanese government bonds to 600 billion yen from 400 billion. The moves, seen as an attempt to kick-start an economy teetering on the edge of recession, met tenuous approval by market players.
``The BOJ's decision was a positive surprise and has lessened the short-term downside risk. We should be in for a short-term bounce,'' said Hideki Kamiya, fund manager at Asahi Tokyo Investment Trust Management, which oversees 388.24 billion yen of investment trusts.
But action by the BOJ alone is not enough, added Kamiya.
``This won't change my investment strategy. For a sustained recovery we need much more from the policy front, such as a clearer vision of how the bad-loan problem will be resolved and a lightening of the tax burden on investors. Moreover, it's very unclear if this money will even reach the real economy.''
Relatively sparse participation because of the summer holiday season exaggerated the market's ascent, traders said. On the first section of the Tokyo Stock Exchange, 595.89 million shares changed hands. The figure was greater than Monday's 451.40 million -- the thinnest volume this year -- but below 632.22 million last Tuesday.
Advancers outpaced decliners 1,042 to 280.
UPSIDE RISK
The capital-weighted TOPIX index (^TOPX - news) firmed 2.72 percent or 31.77 points to 1,198.86, its biggest one-day jump since May 1 when the broader yardstick gained 3.31 percent amid high hopes for reforms from Prime Minister Junichiro Koizumi, who took office in late April.
Some analysts saw the bank's decision to ease as the product of increased political pressure and drew optimism from signs Koizumi may be gaining a more solid footing for his pledged reforms.
``It's too early to see the light at the end of the tunnel, but I think that particularly from a foreign perspective this might be an early indicator Koizumi is beginning to exert his influence on the powers that be -- which is what we've all been hoping,'' said Marc Desmidt, director of the Japanese equity team at Merrill Lynch Investment Managers, which manages 628.81 billion yen of investment trusts.
``Under this leader, the risk has to be on the upside in the short-term.''
Mycal Corp rocketed up 33.33 percent to 120 yen as investors eyed lower borrowing costs for the ailing retailer and continued to cheer news earlier that its main creditor bank was mulling extending it about 50 billion yen in extra loans.
Struggling builders also firmed, with Fujita Corp rising 6.45 percent to 33 yen and Tobishima Corp up 6.52 percent to 49.
Major brokerages gained ground amid hopes the BOJ's easier stance would help stocks recover. Nomura Securities Co Ltd , the nation's number-one broker, jumped 10.2 percent to 2,215.
ADVANTEST, TECHS ADVANCE
Semiconductor testing device manufacturer Advantest Corp shot up 8.81 percent to 8,520 yen, erasing all of Monday's 7.45 percent drubbing after its stunning profit revision announced late last week rattled investor confidence in Japan's tech sector.
Techs also drew buying interest on a 1.32 percent rise in the U.S. Nasdaq index (^IXIC - news), traders said.
Major PC and chipmaker Fujitsu Ltd spurted 7.22 percent to 1,232 yen, while Toshiba Corp -- the country's number-one chip producer -- added 4.03 percent to 620.
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