Japanese stocks advanced by midday on Monday with the Nikkei average hitting a fresh 21-month high as the dollar's surge against the yen lifted exporters such as Toyota Motor Corp.
Toyota jumped 1.79 percent to 3,990 yen after the dollar surged to five-month highs above 112 yen late last week with Japanese authorities again suspected of yen-weakening intervention on Friday to protect the competitiveness of the country's exporters.
In Tokyo morning trade, the dollar bought 112.18 yen
The Nikkei average settled the morning session up 0.35 percent at 11,578.14 after earlier climbing to a high of 11,643.37 -- its highest intraday level since June 6, 2002.
On Friday, the Nikkei gained 1.19 percent to close at a 21-month high of 11,537.29.
The broader TOPIX index was up 0.49 percent at 1,136.52 by midday.
Despite the gains, some analysts warned the market could change course as early as this afternoon as more investors turn cautious ahead of Friday's special quotation (SQ) fixing to settle March futures and options.
The SQ tends to lead to a spike in volume and sometimes causes volatility in stocks.
Caution was also emerging after the market's rally last week in which the Nikkei climbed more than four percent.
"We'll have the SQ this Friday so in theory, players should take to the sidelines," said Yasuo Wada, head of sales at Meiwa Securities.
"Continued buying from last week is supporting the market at the moment, but it (the market) really needs to take a breather after last week's rally. It can't just go up and up every day."
Along with Toyota, Honda Motor Co Ltd rose 0.59 percent to 5,100 yen on hopes a firmer dollar would boost the company's overseas sales.
Canon Inc, which generates about three quarters of its sales overseas, advanced 0.9 percent to 5,630 yen.
Gainers outnumbered decliners 993 to 413. Volume remained brisk, with 974.64 million shares changing hands on the first section, slightly below Friday's 999 million, but well above the February morning average of around 500 million shares.
DOMESTIC ISSUES STAY STRONG
Meanwhile, rising hopes for a Japanese economic recovery continued to lift several domestic-related issues such as retailers.
Seven-Eleven Japan Co Ltd, the country's biggest convenience store operator, jumped 1.69 percent to 3,600 yen. Clothing store chain Shimamura Co Ltd rallied 5.75 percent to 7,910 yen.
Masaru Ueda, head of the investment strategy division at Marusan Securities, said the market's demand-supply condition has improved dramatically in the past several days and although the market's recent rally was expected to lose some steam later this week, fundamentals were still very solid.
"Rising economic optimism is lifting domestic-demand stocks but even if buying of these shares wane, people would still buy exporters because of the firmer dollar. The market has a very healthy cyclical condition," he said. Ueda expects the Nikkei to reach the 12,000 level as early as next week.
Toyota jumped 1.79 percent to 3,990 yen after the dollar surged to five-month highs above 112 yen late last week with Japanese authorities again suspected of yen-weakening intervention on Friday to protect the competitiveness of the country's exporters.
In Tokyo morning trade, the dollar bought 112.18 yen
The Nikkei average settled the morning session up 0.35 percent at 11,578.14 after earlier climbing to a high of 11,643.37 -- its highest intraday level since June 6, 2002.
On Friday, the Nikkei gained 1.19 percent to close at a 21-month high of 11,537.29.
The broader TOPIX index was up 0.49 percent at 1,136.52 by midday.
Despite the gains, some analysts warned the market could change course as early as this afternoon as more investors turn cautious ahead of Friday's special quotation (SQ) fixing to settle March futures and options.
The SQ tends to lead to a spike in volume and sometimes causes volatility in stocks.
Caution was also emerging after the market's rally last week in which the Nikkei climbed more than four percent.
"We'll have the SQ this Friday so in theory, players should take to the sidelines," said Yasuo Wada, head of sales at Meiwa Securities.
"Continued buying from last week is supporting the market at the moment, but it (the market) really needs to take a breather after last week's rally. It can't just go up and up every day."
Along with Toyota, Honda Motor Co Ltd rose 0.59 percent to 5,100 yen on hopes a firmer dollar would boost the company's overseas sales.
Canon Inc, which generates about three quarters of its sales overseas, advanced 0.9 percent to 5,630 yen.
Gainers outnumbered decliners 993 to 413. Volume remained brisk, with 974.64 million shares changing hands on the first section, slightly below Friday's 999 million, but well above the February morning average of around 500 million shares.
DOMESTIC ISSUES STAY STRONG
Meanwhile, rising hopes for a Japanese economic recovery continued to lift several domestic-related issues such as retailers.
Seven-Eleven Japan Co Ltd, the country's biggest convenience store operator, jumped 1.69 percent to 3,600 yen. Clothing store chain Shimamura Co Ltd rallied 5.75 percent to 7,910 yen.
Masaru Ueda, head of the investment strategy division at Marusan Securities, said the market's demand-supply condition has improved dramatically in the past several days and although the market's recent rally was expected to lose some steam later this week, fundamentals were still very solid.
"Rising economic optimism is lifting domestic-demand stocks but even if buying of these shares wane, people would still buy exporters because of the firmer dollar. The market has a very healthy cyclical condition," he said. Ueda expects the Nikkei to reach the 12,000 level as early as next week.
3287.99
1275.09
