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Roundup: Nikkei gains 0.55 pct on wage hikes, hopes for Fed to delay rate hike

Xinhua, March 18, 2015 Adjust font size:

The Nikkei stock index gained 0.55 percent Wednesday to a fresh 15-year high on investors' continued hopes for wage hikes in Japan which will improve the general outlook for the economy, but some profit-taking was seen ahead of the conclusion of the U.S. Federal Reserve's two-day policy meeting.

The Nikkei 225 index increased 107.48 points to close at 19,544. 48, marking its highest close since April 2000, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 11.96 points, or 0.76 percent, to finish at 1,582. 46.

Local brokers said that the market went south in early trade as investors looked to lock in profits following recent gains, but sentiment turned bullish in the afternoon on hopes for ongoing wage hikes at bellwether firms in Japan, with the first round by Toyota, Nissan and Panasonic, being well-received by the market on optimism for positive effects on the broader economy looking ahead.

Stocks are being driven higher as companies agreeing with their unions to raise wages shows that the respective companies are affluent enough to do so and this speaks to a broader sense of health in the economy, said Monex Inc.'s Takashi Hiroki.

With hopes for wage hikes being one driver, the likelihood that the Fed will remove the word "patient" from its statement was not being seen as a negative, but as another driver.

"There are expectations that the word 'patient' will disappear from the forward guidance part of the Fed's statement, while Yellen will say that they're not in a hurry to raise rates in the press conference," said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc.

Nintendo was very much in the spotlight Wednesday following its announcement a day earlier that it would finally start developing games for smartphones in partnership with Japanese gaming firm DeNa Co.

The deal involves cross-sharing and Nintendo buying a 10 percent stake in DeNa for 22 billion yen (182 million U.S. dollars) . DeNa for its part will acquire a 1.24 percent stake in Nintendo for the same investment amount.

Subsequently, Nintendo's shares surged 21.3 percent to close at 17,080 yen, while DeNA rocketed 21.3 percent to end at 1,707 yen.

Bank of Kyoto, a shareholder of Nintendo, also benefited from the news, leaping 14.5 percent to end the day at 1,421 yen.

But energy related issues continued a downward trajectory as oil future slumped to a six-year low, and oil exploration giant Inpex sank 2.9 percent to 1,320 yen, while Idemitsu Kosan closed down 0.2 percent at 2,085 yen.

Trading volume on Wednesday increased to 2.04 billion shares on the Tokyo Exchange's First Section, up from Tuesday's volume of 1.94 billion shares, with advancing issues outnumbering declining ones by 1,030 to 683. Endi