Nikkei Ends Above 16,000 First Time Since 2007; Lira Retreats

Japan’s Nikkei 225 (NKY) Stock Average closed above 16,000 for the first time in six years as the weaker yen boosted exporter earnings prospects. The Turkish lira and stocks fell after a third minister quit amid a graft probe and called for the resignation of Prime Minister Recep Tayyip Erdogan, who instead revamped his cabinet.

The Nikkei 225 climbed 0.8 percent, extending its rally this year to 54 percent, the most among major developed markets tracked by Bloomberg. Japan’s currency fell 0.1 percent at 4:24 p.m. in London, weakening for a third day. The lira slid 0.9 percent against the dollar, reversing earlier gains. China’s seven-day repurchase rate fell for a second day after the central bank injected funds into the financial system. Most global markets are closed for the holidays.

Bank of Japan Governor Haruhiko Kuroda told a business lobby group today the nation’s economy is on a smooth recovery path this year. U.S. reports yesterday showed orders for durable goods and new-home sales rose more than forecast in November, underscoring economic confidence expressed by the Federal Reserve this month when it said it will begin reducing stimulus.

“The yen’s depreciation is due to a stronger U.S. economy and the logic of buying into Japanese stocks is clear -- a weaker yen is good for Japan’s export-oriented economy,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “The funds injection by China’s central bank is pretty symbolic.”

Japan released its economic report for December yesterday, dropping deflation from its view for the first time since 2009.

Yen, China

The Nikkei 225 gained to 16,009.99, the highest close since Dec. 11, 2007. Fast Retailing Co., Asia’s biggest apparel chain, jumped 4.7 percent. The Topix index rose 0.1 percent, erasing a loss of as much as 0.5 percent.

Japan’s core consumer price index is likely to slightly exceed 1 percent by the end of this year, BOJ Governor Kuroda said in Tokyo. The central bank in April set a goal to reach 2 percent inflation in about two years.

The yen, which has tumbled 17 percent this year, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes, declined to 104.38 against the greenback. It slid to 104.64 per dollar on Dec. 20, the weakest since October 2008, and today fell 0.4 percent to 142.8 per euro, the lowest since 2008.

The Shanghai Composite Index (SHCOMP) gained 0.6 percent to 2,106.35, led by oil companies. PetroChina Co., the biggest energy producer, rose 0.7 percent. The seven-day repo fell 86 basis points to 5.5788 percent today, according to a weighted average compiled by the National Interbank Funding Center.

Turkish Resignations

Turkey’s lira depreciated 0.9 percent to 2.096 per dollar and the benchmark equities index slid 4.2 percent. Environment and Urban Works Minister Erdogan Bayraktar resigned as a minister and lawmaker after saying he was under pressure and said the prime minister should also step down, NTV television reported.

Erdogan instead met with President Abdullah Gul in the evening and then announced an overhaul of his cabinet, replacing 10 ministers.

Economy Minister Zafer Caglayan quit earlier today after police detained his son on Dec. 17 in probes into bribery, money laundering, corruption in government tenders and gold smuggling, his office said in a statement today. Interior Minister Muammer Guler also resigned, according to NTV. A raid on Guler’s son’s home found several safes and stacks of cash, according to Haberturk newspaper.

Egypt Payments

Egypt’s EGX 30 Index gained 1.4 percent and Abu Dhabi’s ADX General Index rose 0.6 percent. Dana Gas jumped 15 percent, the most since December 2005, after the company said it received a $53 million payment from the Egyptian government.

Russia’s Micex Index (INDEXCF) fell 0.4 percent and the ruble weakened 0.2 percent to 32.6843 per dollar. The Ukrainian Equities Index (UX) fell for a fifth day, losing 1.2 percent. Ukraine’s central bank sold $3 billion of Eurobonds to Russia as part of a $15 billion package, Prime Minister Mykola Azarov said at a government meeting today in Kiev.

Ukraine’s government is grappling with the biggest protests since the 2004 Orange Revolution after President Viktor Yanukovych snubbed a European integration and trade accord last month in favor of repairing relations with Russia, which had opposed the deal.

U.S. Data

Thailand’s SET Index (SET) gained 0.4 percent. The baht slid after reaching the lowest level since June 2010 yesterday amid political unrest.

The S&P 500 Index (SPX) rose 0.3 percent yesterday, taking its rally this year to 29 percent and putting it on course for its biggest annual gain since 1997. About 2.6 billion shares changed hands in the U.S., the fewest since last Christmas Eve. The Fed said on Dec. 18 it will reduce the pace of bond buying amid faster-than-estimated economic growth.

Bookings for goods meant to last at least three years rose 3.5 percent in November after a 0.7 percent drop the prior month, a Commerce Department report showed yesterday. Purchases of new U.S. homes also exceeded projections in November. Gold advanced 0.5 percent to $1,210.50 an ounce.

To contact the reporters on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net; Jim Powell in Tokyo at jpowell50@bloomberg.net; Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Allen Wan at awan3@bloomberg.net

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