Nikkei 225 Posts Longest Winning Streak Since 1988 on Weaker Yen

Updated on

Japanese shares rose a 10th day as the yen touched its lowest against the dollar since 2002 amid signs the Federal Reserve is preparing to raise interest rates.

Mizuho Financial Group Inc. gained 5.9 percent, the most in two years. Sumitomo Osaka Cement Co. climbed 4.9 percent after JPMorgan Chase & Co. upgraded the stock. Honda Motor Co. added 1.7 percent as the weaker yen boosted exporters.

The Nikkei 225 rose 0.4 percent to 20,551.46 at the close in Tokyo, extending a 15-year high. The Topix index added 0.7 percent to 1,672.76, with about as many shares rising as falling. The yen touched 124.30 before paring losses to 123.62, taking its five-day decline to 2.1 percent.

“A 10-day rally for the Nikkei hasn’t been seen for over 27 years,” Gavin Parry, managing director of Parry International Trading Ltd., said in Hong Kong. “The yen down through 124 per dollar on the Fed rate theme is continuing to spur interest in exporters.”

Central bank Chair Janet Yellen helped drive the yen down, saying last week she expects to raise U.S. borrowing costs this year if the economy meets her forecasts. Bank of Japan Governor Haruhiko Kuroda repeated this week that he’ll adjust monetary policy if needed to meet his inflation target.

U.S. stock futures fell 0.1 percent after equities rebounded on Wednesday as the Nasdaq Composite Index topped its record and the Standard & Poor’s 500 Index gained 0.9 percent.

Honda, a carmaker that gets more than 80 percent of its sales abroad, gained 1.7 percent. Toyota Motor Corp. added 1.7 percent. Nissan Motor Co., which relies on North America for 45 percent of its sales, climbed 1.4 percent.

Cross-Shareholdings

Mizuho gained 5.9 percent for the second-biggest advance on the Nikkei 225. There is speculation the government will urge an unwinding of cross-shareholdings in its June growth strategy, which would have a positive impact on Mizuho, SMBC Nikko Securities Inc. analyst Shinichio Nakamura said.

Sumitomo Osaka Cement gained 4.9 percent for its highest close since 2007 after JPMorgan boosted the stock to neutral from underweight.

European stocks halted a three-day drop after Greece said it had started crafting an accord with creditors to solve its debt crisis. The European Commission said a deal is not imminent and much work remains to be done. Time is running out for the nation to receive funding ahead of almost 1.6 billion euros ($1.74 billion) in International Monetary Fund payments scheduled for next month.

Developments in Greece are “creating risk-on sentiment,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. “It’s likely that the yen will continue to slowly weaken and we’ll have a global risk-on mode. Stocks won’t rise too quickly but they’ll have a steady climb.”

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