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DJ Tokyo Shares Set 6-Year High as Nikkei Breaks 16,000 Mark
December 24, 2013

By Brad Frischkorn TOKYO--The Nikkei Stock Average broke the 16,000 mark en route to setting a fresh six-year year high Tuesday, the first time it has hit that level since Dec. 11, 2007, helped by a resilient dollar and active hedge-fund buying. Canon and KDDI ranked among the large-cap exporters and heavily weighted shares that rose. The pair ended up 0.9% and 3.1%, respectively, outperforming the broader market. The Nikkei itself gained 0.1% to 15,889.33, extending its winning streak to five days. The benchmark has now added almost 5% over the span, and continues to feed off of U.S. share-buying enthusiasm and a strong dollar. The greenback was trading hands at Y104.18 as of the TSE close at 0600 GMT. The Topix index of all Tokyo Stock Exchange First Section issues fell for the second straight session, dropping 4.09 points, or 0.3%, to 1257.56, with 26 of 33 subindexes ending in negative territory. "Keying on the weaker yen, foreign hedge funds traditionally inactive during the holiday season are aggressive on the buy side," said Tachibana Securities operating officer Kenichi Hirano. "This could signal that a longer-term major rotation to equities from bonds has begun." Meanwhile, Japanese retail investors and mutual funds are big sellers heading into the year-end, as tax rates on capital gains and dividends are set to double to 20% starting in January, noted Mitsushige Akino, fund manager at Ichiyoshi Asset Management. Dec. 25 is the final day trades can be settled this calendar year. The activity resulted in robust overall participation, with volume hitting 2.59 billion shares--the fourth straight session it has surpassed the 2.5 billion level. The value of all trades was also strong at just over Y2.3 trillion. Despite some signs of being overbought, the Nikkei's intraday breach of the 16,000 level is psychologically important, as it offers reassurance to investors about underlying market sentiment as the New Year approaches, said Junya Naruse, chief strategist at Daiwa Securities. March Nikkei 225 futures closed up 30 points, or 0.2%, at 15,900 on the Osaka Securities Exchange. Write to Brad Frischkorn at bradford.frischkorn@wsj.com.