Japanese exporters gain on yen weakness

Japanese shares rose for a fourth straight session on Wednesday to end at a two-week high as the yen stayed weak and fears of an outright US recession receded slightly on better-than-expected retail data.

The yen traded at a seven-week low against the dollar of around Y114.2, helping export-related stocks and pushing the Nikkei index up 0.7 per cent, or 100.95 points, to 15,653.54. The broader Topix index rose 0.8 per cent, or 12.44 points, to 1,508.47.

The yen has weakened steadily since it broke through the Y110 level in November, sparking concern that the carry trade could unwind and the Japanese currency strengthen to Y100 to dollar.

Subsequent weakness has helped exporters. On Wednesday, Toyota (NYSE:TM) rose 1.3 per cent to Y6,180, helped by company projections that its global production would increase 5 per cent in 2008 to 9.85m units. Nissan (NASDAQ:NSANY) rose 1.6 per cent to Y1,223.

Canon (NYSE:CAJ), which makes photocopiers and digital cameras, was another beneficiary, gaining 1.7 per cent to Y5,330.

The rising market helped neither Sanyo (NASDAQ:SANYY), the battery and consumer electronics company, nor Central Japan Railway, which both fell sharply.

Sanyo dropped 10.7 per cent to Y167 following its restatement of earnings for six years to March 2006 and its admission that, as a result, it had paid illegal dividends on five occasions. Analysts said that although the company's financial position was not directly affected, its reputation could suffer.

Central Japan Railway, also known as JR Tokai, fell 8.85 per cent to Y1.03m after confirming its intention to build a $45bn magnetic railway link between Tokyo and Nagoya by 2025.

Yasuharu Sugimura, transport analyst at Goldman Sachs, said there was nothing new in the announcement that the company intended to build the high-speed link at that price tag. But he said investors may have been concerned about the lack of detail on how the company planned to finance such a large investment and the possible effect on profits.

Turnover was extremely thin with many Asian and other markets closed for Christmas and Japan preparing for a lengthy new year's holiday.