By Kevin Buckland
TOKYO, March 22 (Reuters) - Japan's financial stocks
joined a global rally on Wednesday to put the Nikkei share
average on course for its biggest gain in two months, even as
investors braced for a crucial Federal Reserve policy decision
later in the day.
Nomura Holdings and Daiwa Securities each
posted gains in excess of 4% as investors took heart from
assurances by U.S. Treasury Secretary Janet Yellen that decisive
action from regulators had stabilized the financial system.
A sharp weakening in the safe-haven yen overnight
also buoyed the Japanese market, with automakers getting a
particular boost. Energy shares also rallied amid strong gains
in crude oil prices, while gains for U.S. tech shares helped
lift Japanese chip stocks.
"Worries about the financial sector have retreated one
notch, and as a result the Japanese stock market is moving to
retrace what it lost on Monday," said Maki Sawada, a strategist
at Nomura Securities.
However, with the Fed decision almost certain to impact
global stock markets, "once the initial spate of buying is
finished, Japanese stocks are likely to become top heavy," she
added.
The Nikkei rose 1.9% as of the midday recess, which
if sustained would be its biggest gain since Jan. 18. It was at
one point up 2% at 27,478.47, the highest level since Monday of
last week.
Financials were the best performing sector, jumping 2.7%,
followed by a 2.4% rally in energy shares.
The broader Topix added 1.8% to 1,964.37. It earlier
touched 1,968.70 for the first time in a week.
Japanese markets were closed on Tuesday for a public
holiday.
Money markets now lay 83% odds on a quarter point hike, up
from closer to a coin flip earlier in the week. Nissan led gains among automakers, surging 4.1%.
Honda advanced 2.8%, while Toyota added 1.9%.
Chipmaking equipment giant Tokyo Electron gained
2.2%, and chip-testing equipment maker Advantest rose
2.8%.
(Reporting by Kevin Buckland; Editing by Nivedita
Bhattacharjee)
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