Nikkei gains as exporters rise, tech shares strong

By Elaine Lies

TOKYO (Reuters) - Japan's Nikkei average rose 1.1 percent on Tuesday, the first full trading day of 2009, as Canon Inc (7751.T) and other exporters rose on a weaker yen and hopes for the U.S. administration taking office later this month.

Investors keen to buy shares that had been sold off heavily last year helped boost high techs such as Kyocera Corp (6971.T) and carmakers, while Fast Retailing Co Ltd (9983.T) rose on robust December sales. Toyota Motor Corp (7203.T) rose in line with the broader market, despite a plunge in U.S. auto sales for December, after it said it would tackle the sharp deterioration in global demand with plans to halt production at all of its domestic plants for a total of 11 days in February and March.

"Growing expectations for the administration of (U.S. President-elect Barack) Obama are making investors that much more willing to take risks, and I think we're also seeing more buying by foreign investors," said Hideyuki Ishiguro, supervisor at the investment advisory department of Okasan Securities.

"It's a fact that foreign orders are increasing, and I think the more established stock markets have greater liquidity than those of emerging markets."

Wall Street slipped on Monday as investors moved to lock in profits, but Ishiguro said that Tokyo shares were supported by a sense that they remained relatively cheap. The Nikkei lost 42 percent in 2008, its worst year ever.

"The sort of scenario in which the market will really plunge seems to be behind us, so...it's not that bad a time to invest," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"Of course, though, we still have the whole issue of company results ahead of us. But there does seem to be a small shift going on right now from bonds to stocks."

The benchmark Nikkei .N225 gained 101.55 points to 9,144.67 after hitting 9,171.03, its highest point in two months. The broader Topix rose 0.5 percent to 880.51.

But some in the market still urged caution.

"The Nikkei has gone up for five trading days, and there's a sense the market may be a bit overheated, with investors moving to lock in profits," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

EXPORTERS, HIGH TECH The U.S. currency hit a nearly one-month high against the yen on Monday as investors cheered Obama's plans to propose up to $310 billion in tax cuts as part of a massive economic stimulus package, but pared its gains slightly during Tokyo trade.

Still, the dollar remained above 93 yen, giving exporters a boost. A stronger yen eats into profits when repatriated.

Canon climbed 3.9 percent to 2,940 yen, making it the third-largest contributor to the Nikkei 225 by volume weight. Sony Corp (6758.T) rose 5.8 percent to 2,085 yen and Hitachi Ltd (6501.T) rose 4.7 percent to 381 yen.

Toyota climbed 1 percent to 3,040 yen.

Okasan's Ishiguro said the market had to some extent factored in predictions of bad results for high-tech firms in the current quarter and investors were buying on expectations of a recovery in the second half of the year.