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Monday, 11th March 2013
In Business In Japan,

Nikkei hits 4-year high

Strong employment and economic information coming from the US caused Japan's Nikkei share average to close at a four-and-a-half-year high today (March 11th).

The information coming out of the US saw heavy investment in financials and exporters, as the yen continued to weaken in the face of recovery in the US.

As well as a weak currency compared to the dollar, there was also increased hope of monetary easing in Japan, which has been a major part of new prime minister Shinzo Abe's government.

The Nikkei closed 0.5 per cent up at 12,349.05, which is a higher level than that seen before the Lehman Brothers collapse and the global recession.

Market gains were underpinned by the weak yen, which slumped to more than 96 per dollar, its weakest since 2009.

As well as the strong data coming out of the US, Japan's stock market was impacted by reports of inflation in China and weak activity in the domestic market, which has resulted in slow economy and industrial growth.

Matthew Sherwood, head of investment market research at Perpetual in Sydney, said: "The world's largest economy continues to recover, while the world's second-largest economy looks like it has run into a bit of a soft patch."

Makoto Kikuchi, chief executive of Myojo Asset Management, explained that the expectations for the next fiscal year are looking positive, which has encouraged investors to chase the market higher in recent months.

He predicted that the Nikkei could rise even further in the coming months, estimating that it could top the 13,000 mark by June, particularly with listed companies predicting a rise in their operating profits for the year ending March 2014.

Car manufacturers saw a real boost in trading today with a Citi report raising the target prices of the Honda Motor Company and Nissan Motor Company, with the former seeing a 2.6 per cent rise, while Nissan was up 3.2 per cent.

Written by Mark Smith