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Tokyo: Nikkei index breaks 19,000 for first time in 15 years

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[TOKYO] Tokyo's Nikkei index on Friday ended above 19,000 points for the first time in 15 years as foreign investors pile into Japanese stocks, while factory robotics giant Fanuc surged after a pledge by its top executive to boost investor returns.

The benchmark Nikkei 225 at the Tokyo Stock Exchange advanced 1.39 per cent, or 263.14 points, to 19,254.25, its best close since April 2000, while the Topix index of all first-section shares rose 0.89 per cent, or 13.70 points, to 1,560.33.

"As the market performs even though the yen is fairly stable, it'll become harder for foreign investors to ignore Japanese stocks," said Mikio Kumada, a strategist at LGT Capital Partners.

"They'll continue to pile in, helping drive the market higher.

Fanuc led the charge on Friday, soaring 13.20 per cent to 26,870.0 yen. The spike came as Japan's leading Nikkei business daily published an interview in which the firm's boss said he was eyeing ways to boost shareholder returns, and said the company, long known for its secrecy, would set up an investor relations department.

That comes fewer than two months after US hedge fund Third Point said it had invested in Fanuc and planned to push for change, noting the firm was sitting on US$8.5 billion in cash and had no debt.

Fanuc said its attempts to improve transparency were not related to Third Point, which is run by American billionaire Daniel Loeb.

Buying sentiment in Tokyo was also lifted by a surge on Wall Street, where the Dow jumped 1.47 per cent, the S&P 500 added 1.26 per cent and the Nasdaq rose 0.89 per cent, while a weaker yen also supplied a boost.

In forex markets, the dollar bought 121.45 yen, up from 121.29 yen in New York.

The greenback's ascent against the yen is generally good for major exporters as it makes them more competitive overseas and inflates the value of their repatriated profits.

Tokyo has also been winning support from an inflow of cash from foreign investors and Japan's public pension fund - the world's biggest - as it shifts more of its bond-heavy portfolio into stocks.

Analysts are tipping strong corporate earnings as Japan's latest reporting season gets underway next month.

"There are lots of positive catalysts," Tsuyoshi Shimizu, chief strategist at Mizuho Asset in Tokyo, told Bloomberg News.

"Companies will probably report a 20 per cent increase in earnings in the next reporting season." Panasonic rose 0.13 per cent to 1,528.5 yen, Toshiba gained 0.57 per cent to 479.1 yen and Uniqlo clothing chain operator Fast Retailing jumped 1.67 per cent to 46,275.0 yen.

The world's biggest automaker Toyota spent most of the day in positive territory but ended 0.01 per cent lower at 8,257.0 yen owing to profit taking shortly before the close.

AFP