国际英语新闻：Nikkei rises 0.9% on weak yen, U.S. tax cut plans

TOKYO, Dec. 8 (Xinhua) -- Tokyo stocks rebounded Wednesday, with the key Nikkei stock index gaining 0.90 percent as a possible extension to U.S. tax cuts sent the U.S. dollar higher against the yen, bolstering Japan's exporter-related issues.

Brokers said that news that U.S. President Barack Obama had agreed in principle to a framework to extend the previous administration's tax cuts for two years, as part of a deal that will include a 2 percent payroll tax deduction and an extension of jobless benefits, saw U.S. Treasury yields surge pushing the U.S. dollar to a near three month high versus its Japanese counterpart.

"The dollar/yen rate now stands at well over 83 yen, and that's pretty much the biggest positive factor supporting stocks today," said Kenichi Hirano, operating officer at Tachibana Securities.

Analysts indicated that recent signs the health of the global economy is showing signs of improvement, coupled with the yen's depreciation, will encourage investors to return to Japanese export-related issues.

"The global economy is on track for mild recovery in terms of fundamentals,"said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc."Investors are likely to buy stocks, led by those of export-related industries, on the reversal of the yen's appreciation."

"The market lacks major buying incentives other than the softer yen, but stocks are gaining. So funds are probably shifting from bonds to stocks as well," said one Tokyo based market specialist.

The 225-issue Nikkei Stock Average closed up 91.23 points from Tuesday at 10,232.33, its highest close since June 21.

The Nikkei today also hit a 7-month intraday high of 10,258.90, demonstrating that a bullish sentiment is underpinning the market and encouraging retail investors in particular to chase the market higher, according to market analysts.

Meanwhile, the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 8.29 points, or 0.94 percent, to 887.39, with the total value of shares exchanged on the index rising to more than 300 trillion yen (3.58 trillion U.S. dollars) for the first time since June 22.

As the yen depreciated and the U.S. dollar strengthened against most other major currencies, Japanese exporters performed well as a weaker yen boosts the value of profits made abroad when repatriated.

Subsequently, Sony Corp. added 1.9 percent to 3,040 yen and Kyocera Corp., heavily reliant on the U.S. for its earnings, gained 1.4 percent to 8,690 yen. Hitachi Construction Machinery Co. Ltd. also closed in positive territory, climbing 1.4 percent to 2, 000 yen.

Among Japanese automakers notably contributing to the Nikkei's rise, Toyota Motor rose 0.8 percent to 3,280 yen and Honda Motor jumped some 2 percent to 3,135 yen. Fuji Heavy Industries Ltd., the maker of Subaru brand vehicles, was also among Wednesday's gainers, advancing 1.6 percent to close at 630 yen.

But Sumco Corp. marked a particular black spot on the Nikkei today, as the maker of silicon wafers plummeted 9.6 percent to 1, 211 yen, on 3.9 times its 30-day average volume, following the firm announcing it expected a net loss of 66 billion yen (790 million U.S. dollars) for the year to January 2011, compared with its previous forecast of a 12 billion yen (142.94 million U.S. dollars) loss.

With a key metal index rising yesterday resource-issues advanced as commodity prices rose and trading houses continued to capitalize.

Mitsui climbed 1.3 percent to 1,379 yen and its counterpart Sumitomo Corp. rose 1.2 percent to close at 1,188 yen.

Trading volume on Wednesday increased to 1.92 billion shares on the Tokyo Exchange's First Section, up from 1.72 billion on Tuesday, with declining issues outnumbering advancing ones by 1, 260 to 280.