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Tokyo shares close above 16,000

Tokyo: Tokyo stocks closed 0.76 per cent higher on Wednesday, renewing its six-year-high, backed by a weaker yen and a refreshed year high on Wall Street on the back of strong economic data.

The bellwether Nikkei 225 index ended 120.66 points higher at 16,009.99, reversing earlier losses at the start.

The Topix index of all first-section issues was up 0.05 percent, or 0.63 points, to 1,258.18.

“The market is in a tug of war surrounding a 16,000 closing price,” Junya Naruse, chief strategist at Daiwa Securities, told Dow Jones Newswires shortly before the closing.

The index’s above-16,000 close in 2013 has a significant effect on investors’ minds as they welcome 2014, he said.

“The Nikkei’s finish above 16,000 will likely contribute to further improvements in Japan’s economic sentiment at the start of the new year as it is likely to encourage further spending during the holiday season.”

The November report on US durable goods orders showed an increase of 3.5 percent, more than expected. That was followed by a report on new home sales in the US that also bested expectations.

But foreign investors’ buying may offset Japanese investors’ selling as they continue to shed equities to meet Wednesday’s deadline to close their positions before Japan doubles tax rates on capital gains and dividends in January, analysts said.

Tuesday’s data came on the heels of other recent better-than-expected US economic reports, which have strengthened positive sentiment about the world’s biggest economy after the Federal Reserve last week moved to scale back their stimulus.

A strong dollar, ongoing monetary easing by the Federal Reserve, the recovering US economy, and low interest rates were expected to offer support to Japanese equities, Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities, told Dow Jones Newswires.

The dollar fetched 104.39 yen on Wednesday compared with 104.27 yen in New York Tuesday afternoon.

The euro bought $1.3668 and 142.71 yen against $1.3681 and 142.65 yen.

Japanese mobile phone carrier SoftBank was down 0.45 percent at 8,770 yen following a Nikkei report that it intends to buy a majority of the shares in T-Mobile US through its US subsidiary Sprint as early as next spring at an estimated cost of more than 2 trillion yen ($19 billion).