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Japan's Nikkei races to 6-month peak, SoftBank stars

Dominic Lau
Thursday, 21 Nov 2013 | 8:18 PM ET

* SoftBank jumps to 13-year high after Loeb reveals stake

* Nikkei heads for 2nd straight week of gains

TOKYO, Nov 22 (Reuters) - Japan's Nikkei scaled a six-month peak on Friday, powered by gains in exporters after the yen slumped to a 4-1/2 month low versus the dollar, while SoftBank Corp jumped after hedge fund manager Daniel Loeb revealed a $1 billion-plus stake. Index heavyweight SoftBank climbed 3.8 percent to a 13-year high after Loeb on Thursday disclosed a $1 billion-plus stake in the Japanese mobile operator. It was the top-weighted gainer in the Nikkei and the most traded stock on the main board. Risk sentiment was also buoyed by overnight gains in U.S. stocks, with the U.S. Dow Jones industrial average closing above 16,000 for the first time. The Nikkei advanced 0.8 percent to 15,482.17 after rallying 1.9 percent on Thursday. The index is up 2.1 percent this week, heading for a second straight week of gains after banking its biggest weekly rise in four years last week. The rally took the benchmark Nikkei to "overbought" territory, however, with its 14-day relative strength index at 70.7, slightly above the 70-threshold which deems overbought. The index also held near the upper band of the Bollinger Bands - a bearish signal. "You've got the Senate Banking Committee confirmed (Federal Reserve Chair-nominee Janet) Yellen. Everybody likes this dovish outlook, reducing the risk profile of the yen," a senior dealer at a European brokerage in Tokyo said. "It looks all relatively decent." Exporters were in demand as the yen slid to a 4-1/2 month low of 101.36 yen to the greenback. A weaker yen helps boost Japanese companies' competitiveness, as well as their profitability when they repatriate overseas earnings. Toyota Motor Corp, Honda Motor Co Ltd, TDK Corp and Panasonic Corp were up between 1.3 and 2.8 percent. Another trader said quant funds were active in the market. Driven by Japan's massive fiscal and monetary stimulus, the yen has fallen nearly 17 percent against the dollar this year while the benchmark Nikkei has rallied 49 percent - the best among major developed markets. Despite this year's rally, Japanese equities carried a 12-month forward price-to-earnings of 14, below a 10-year average of 16.1 and cheaper than the U.S. Standard & Poor's 500's 14.9, according to Thomson Reuters Datastream. Sony Corp underperformed the broader market, down 0.1 percent, with the trader saying investors were concerned that Microsoft Corp's Xbox One may outsell Sony's PlayStation 4. The stock is still up 2.6 percent this week, however. The broader Topix index was up 0.6 percent at 1,253.86 in mid-morning, with volume at 32 percent of the full daily average for the past 90 trading days. Kuraray Co Ltd, a synthetic fibre manufacturer, surged 3.8 percent after DuPont said it would sell its glass-laminating and vinyl business to the Japanese firm for $543 million.

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