Japan’s Nikkei 225 Stock Average closed above 16,000 for the first time in six years, extending gains in the finals minutes of trading, as clothing retailer Fast Retailing Co. led the equity benchmark higher.
Fast Retailing, the heaviest-weighted stock on the Nikkei 225, gained 4.7 percent. Nippon Paper Industries Co., Japan’s second-biggest maker of the material by market value, advanced 3.4 percent as the sector led gains on the Topix index. SoftBank Corp. slid 0.5 percent on a report the carrier is considering an offer for T-Mobile US Inc. next spring.
The Nikkei 225 gained 0.8 percent to 16,009.99, the highest close since Dec. 11, 2007. The Topix index rose less than 0.1 percent to 1,258.18, erasing losses of as much as 0.5 percent. U.S. data economic data released yesterday beat estimates and the yen held near a five-year low. Markets across Asia are shut today for Christmas.
“The dollar-yen is holding up because U.S. fundamentals are strong, adding confidence to the market,” said Koji Toda, chief fund manager at Resona Bank Ltd., Japan’s fifth-largest lender by market value. “The Nikkei’s rally is based on fundamentals while you see some signs of overheating.”
Fast Retailing, Asia’s biggest clothing chain, gained 4.7 percent to 44,350 yen. The Nikkei 225’s 14-day relative strength index, a measure of trading momentum, rose to 65 toward the 70 threshold that some investor see as a sign to sell.
The Standard & Poor’s 500 Index gained 0.3 percent yesterday, extending a record. Orders for durable goods rose 3.5 percent in November after a 0.7 percent drop month before, a government report showed yesterday. Economists surveyed by Bloomberg had called for a 2 percent advance. New-home purchases held near a five-year high, showing the housing recovery gaining momentum even as mortgage rates climbed.
Nippon Paper added 3.4 percent to 1,999 yen. The company said it agreed to buy the rest of the shares of Jujo Thermal Oy from partner Ahlstrom Corp. The Topix Pulp & Paper Index gained 1.7 percent to lead gains among the broader gauge’s 33 industry groups.
Nippon Meat Packers Inc. gained 3.5 percent to 1,818 yen. Goldman Sachs Group Inc. recommended the sausage maker, raising the share outlook to 1,950 yen from 1,500 yen.
SoftBank dropped 0.5 percent to 8,770 yen. The Nikkei newspaper reported the company aims to buy a majority of T-Mobile shares for more than 2 trillion yen ($19 billion). The Japanese carrier is in talks with U.S. financial institutions to borrow funds, the report said.
Unicharm Corp. slid 2.8 percent to 5,830 yen. Daiwa Securities Co. downgraded the baby products company’s rating to neutral from outperform, lowering the target price to 5,340 yen from 7,080 yen.
The Topix rose 46 percent this year, the most among 24 major developed markets tracked by Bloomberg, as Prime Minister Shinzo Abe and the Bank of Japan took steps to end 15 years of deflation. The Topix traded at 1.28 times book value today, compared with 2.65 for the S&P 500 Index and 1.80 for the Stoxx Europe 600 Index yesterday.
Japan’s core consumer price index is likely to slightly exceed 1 percent by the end of this year, BOJ Governor Haruhiko Kuroda said today in remarks to the Keidanren business lobby in Tokyo. The central bank in April set a goal to reach 2 percent inflation in about two years.