Nikkei rises to fresh 1-year high on strong Wall St; defensive stocks catch up

  • Reuters
  • Stock Market News
Nikkei rises to fresh 1-year high on strong Wall St; defensive stocks catch up
Credit: © Reuters.

* Nikkei trades 6 pct above 25-day moving average

* TDK soars on news it is in talks to buy U.S. chipmaker

By Ayai Tomisawa

TOKYO, Dec 12 (Reuters) - Japan's Nikkei share average rose to a fresh one-year high on Monday morning helped by strong Wall Street performance and a weak yen, while investors picked up defensive stocks that were lagging behind in the recent rally.

By mid-morning break, the Nikkei .N225 rose 0.8 percent to 19,142.82 after hitting as high as 19,280.93, the highest level since mid-December last year.

Shares in the food sector and other defensive stocks staged a rally as traders say investors are picking up shares in sectors that have lagged in the month-long rally since Donald Trump's presidential election. The rally may continue through the year end unless there is a negative surprise in the U.S. Federal Reserve's decision this week, they added.

"Although people are worried that the market is being overbought in a short period of time, they started to think that the Nikkei may continue rising and end this year at the highest level this year," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The Nikkei is trading about 6 percent above its 25-day moving average of 18,051. A level above 5 percent is seen as overbought.

The Fed is widely expected to hike interest rates for the first time in 2016 at a two-day meeting that begins on Tuesday.

The dollar edged up 0.1 percent to 115.43 yen JPY= after earlier touching 115.55 yen, its loftiest peak since February, boosting the overall mood.

Food stocks, which were lagging behind the rises in exporters and financials, were higher. Kikkoman Corp 2801.T jumped 7.1 percent and Ajinomoto Co 2802.T soared 5.0 percent.

Utility stocks also gained ground, with Tokyo Gas 9531.T rising 4.7 percent and Osaka Gas 9532.T advancing 2.3 percent. Railroad stocks were stronger, with East Japan Railway 9020.T gaining 1.7 percent and West Japan Railway 9021.T surging 3.4 percent.

Separately, TDK Corp 6762.T jumped 3.7 percent after sources said that the company is in talks to buy U.S. chipmaker InvenSense Inc INVN.N that produces motion sensors for Apple Inc AAPL.O and Samsung Electronics Co 005930.KS . broader Topix .TOPX added 0.2 percent to 1,528.43 and the JPX-Nikkei Index 400 .JPXNK400 advanced 0.3 percent to 13,691.41.

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