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Nikkei rebounds 1.1 pct as exporters gain on weaker yen, BOJ eyed

Ayai Tomisawa
Monday, 17 Feb 2014 | 9:34 PM ET

* Investors buy laggard Japanese stocks on attractive valuation - analyst

* Speculation BOJ may hint of more stimulus - trader

TOKYO, Feb 18 (Reuters) - Japan's Nikkei share average bounced from a 1 1/2-week low on Tuesday morning, spurred by a retreat in the yen and investor hopes the central bank will hint of further stimulus after surprisingly soft fourth quarter gross domestic product data. The Nikkei rose 1.1 percent to 14,620.20 in mid-morning trade, moving away from lows of 14,214.60 hit on the previous day after sentiment was soured by the soft fourth quarter growth figures. The Bank of Japan is widely expected to keep monetary policy steady when it concludes its two-day review later in the day, but traders say pressure is mounting for more easing steps to bolster the economy. "Some people have been speculating that the Bank Of Japan may announce more ETF buying," said a trader at a foreign brokerage, adding that markets will be keen to hear from BOJ Governor Haruhiko Kuroda at his post-review press conference. Exporters rose as the dollar tacked on 0.2 percent to 102.10 yen, pulling away from a nearly two-week low of 101.37 yen hit in the previous session. Sony Corp added 1.3 percent and Canon Inc jumped 1.7 percent. A weak yen lifts Japanese exporters' competitiveness abroad as well as their dollar earnings when repatriated. "Foreign investors are picking up recently battered Japanese stocks as their valuations are seen relatively attractive," said Isao Kubo, equity strategist at Nissay Asset Management. The Nikkei has come off about 10 percent since the start of the year after booming 57 percent in 2013 on the back of aggressive BOJ and government stimulus. Profit-taking and recent emerging markets turmoil were partly responsible for this year's retreat. Year-to-date, the U.S. S&P 500 Index for example, has fallen 5 percent. The Nikkei is trading 13.8 times expected earnings for the year through March, while the S&P trades 18.4, according to Thomson Reuters Starmine. The Topix gained 1.0 percent to 1,204.47. The JPX-Nikkei Index 400, an index launched this year comprised of firms with high return on equity and strong corporate governance, gained 1.0 percent to 10,886.36.