Japan’s Nikkei average booked a 19 percent gain this year, with shares of high-tech exporters leading a rebound rally on a weaker yen and as economic stimulus measures helped turn around the world economy.
The benchmark’s yearly climb followed a 42 percent plunge — the biggest loss in its 58-year history — last year when investors saw the global financial crisis take a heavy toll on risky assets including stocks.
On the Tokyo stock market’s final trading day of the year yesterday, the Nikkei ended down 0.9 percent, dragged lower by bankruptcy worries about Japan Airlines.
“Weakening in the yen, a gradual recovery in the economy and growing demand for companies helped buoy the market in time for the year-end,” said Naoki Koga, a senior fund manager at Toyota Asset Management.
“But domestic-demand sectors, on the other hand, fell out of favor this year due to uncertainty about the government’s policy. Financial stocks, in particular, were hurt by worries about capital raisings,” Koga said.
In moderate trade, the benchmark Nikkei closed at 10,546.44 after earlier rising to 10,707.51, its highest since Aug. 31. It has clawed back about 50 percent since hitting a 26-year closing low in March.
The broader Topix slipped 0.9 percent to 907.59.
In one encouraging technical sign for the Nikkei, its 25-day moving average edged above its 75-day moving average, a phenomenon known as the “Golden Cross” that can often indicate further rises and is regarded as a buying signal.
“We’re likely to see the market off to a strong start in the new year. But the focus in the first half will be on corporate earnings for the next business year, with government policies holding the key for their direction,” Koga said.
The dollar’s surge against the yen to a two-month high earlier helped shares of exporters as investors welcomed a weaker yen, which boosts exporters’ profits when repatriated, but many lost steam in afternoon trade.
The greenback was steady above 92 yen, led by buying on last-minute commercial needs before the end of the year.
Japanese financial markets will be closed today and tomorrow for the New Year’s holiday.
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