TOKYO, Feb 7 (Reuters) - Japan's Nikkei index edged up
on Tuesday as sentiment was buoyed after the yen weakened, while
banking shares led gains on expectations that the Bank of Japan
(BOJ) may be on track to normalize its monetary policy.
The Nikkei share average was up 0.22% at 27,754.36
by the midday break, on course for a fifth straight session of
gains. The broader Topix was up 0.45% to 1,988.04.
"The market is keeping its momentum as the yen's gain
against the dollar paused," said Yugo Tsuboi, senior strategist
at Daiwa Securities.
The dollar hovered near a one-month peak as traders
raised their forecasts of U.S. Federal Reserve interest rate
levels needed to tame inflation. The yen weakened since the previous session after a report
said Japan might pick a dovish policymaker as its next central
bank governor.
The Japanese government is considering presenting to
parliament its nominees for next BOJ governor and two deputy
governors sometime next week.
Stronger growth in Japanese wages have driven expectations
that the BOJ would alter its ultra-rate policy, said Tsuboi.
Government data showed Japanese real wages rose for the
first time in nine months thanks to robust temporary bonuses,
but uncertainty remains on whether pay hikes will continue to
sustain Japan's economic recovery.
"Japan's wage was firmer than expected, and the BOJ is
expected to normalize its monetary policy depending on who
becomes the governor."
Among individual shares and sectors, the banking sector rose
2.6% to be the top gainer among the 33 industry sub-indexes.
Mitsubishi UFJ Financial Group Sumitomo Mitsui
Financial Group rose 3.4% and 2.37%, respectively.
Heavyweight technology stocks also advanced, with Tokyo
Electron and Advantest gaining 0.67% and
1.75%, providing the biggest boost to the Nikkei.
Bucking the trend, JFE Holdings tanked 8.12% to
become the worst performer after Japan's second-biggest
steelmaker lowered its forecasts for crude steel output and
full-year profit.
Kobe Steel lost 1.87%.
(Reporting by Junko Fujita; editing by Uttaresh.V)
