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Japan’s Nikkei rises for eighth day on earnings optimism, weaker yen

April 18, 2023By Reuters

Japan’s Nikkei share average climbed for an eighth straight session on Tuesday, boosted by gains in banks on positive US data and as a weaker yen lifted exporters.

The Nikkei rose 0.51% to close at 28,658.83, nearing the highest level so far this year and marking its longest winning streak since March 2022. The broader Topix  climbed 0.69% to 2,040.89.

Chiba Bank Ltd led gains on the Nikkei, jumping 3.38%, while lender Resona Holdings Inc added 2.08%. Mazda Motor Corp climbed 1.87% after the yen held a two-day decline to trade near its weakest in a month.

US shares rose on Monday after several banks kicked off first-quarter reports with strong results and a positive reading from the New York Fed’s barometer of manufacturing activity.

“Earnings expectations have been OK. The yen has settled down, at a level weaker than last year,” said Quiddity Advisors analyst Travis Lundy, who publishes on Smartkarma.

Comments by billionaire investor Warren Buffett last week that he was adding to investments in Japan, along with regulatory pressure on companies with low price-to-book (PBR) ratios, are adding to buying cues, he said.

“There are expectations that lower PBR stocks being ‘forced’ to become higher PBR stocks will mean cross-holding unwinds and buybacks,” he said.

The Nikkei is trading more than 3% over its 25-day moving average, which may be a sign of volatility ahead, Nomura Securities strategist Kazuo Kamitani said.

“It’s too early to say the market is overheating, but it could be a warning sign for high values,” he said.

There were 175 gainers on the Nikkei against 43 that fell. Inpex Corp dropped 2.13%, pacing declines among energy shares after oil prices LCOc1 slid in US. trading.

Sega Sammy Holdings Inc slipped 2.78% after announcing on Monday it planned to acquire Angry Birds game maker Rovio Entertainment Oyj for 706 million euros (USD 776 million).

(Reporting by Rocky Swift; Editing by Sonia Cheema and Subhranshu Sahu)

This article originally appeared on reuters.com

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