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"month closing high, up 3.3 pct this week    * Exporters gain as yen hits 7-1/2-month vs dollar    By Dominic Lau    TOKYO, Nov 22 (Reuters) - Japan's Nikkei average climbed 1.6percent to a 6-1/2-month closing high on Thursday, boosted bygains in automakers and electronics companies on expectationsthat a sharply weaker yen will boost their earnings.    Exporters such as Toyota Motor Corp, Honda Motor Co, Nissan Motor Co and Canon Inc wereamong the seven most-traded stocks on the main board byturnover, and gained between 2.3 and 3.5 percent.    A 4 percent slide in the yen against the dollar in the lastweek and a half, driven by expectations that the Bank of Japanwould take aggressive monetary policy under a likely newgovernment, has increased the allure of long-suffering exportershares and pushed Japanese stocks higher.    A softer yen, which hit a 7-1/2-month low of 82.59 yen tothe dollar on Thursday, inflates exporters' overseas earningswhen repatriated and lifts their price competitiveness,particularly against South Korean and Chinese rivals.    The Nikkei ended 144.28 points higher at 9,366.80,its highest closing level since May 2 and taking the index near&amp;quot;overbought&amp;quot; territory, with its 14-day relative strength indexat 69.5. Seventy or above is deemed overbought.    The benchmark rose 3.8 percent this week, itssecond-straight weekly gain and bringing its advance to 10.8percent for the year. Japan's financial markets will be closedon Friday for a national holiday.    The Nikkei's year-to-date performance is slightly ahead ofthe U.S. S&amp;P 500's 10.6 percent rise and the pan-EuropeanSTOXX Europe 600's 10.5 percent gain.    &amp;quot;Investors are increasingly relieved that exporters'earnings will be better than expected if the yen's weaknesscontinues,&amp;quot; said Hiroichi Nishi, general manager at SMBC NikkoSecurities.    Japanese company earnings have been weak this quarterlyreporting season, with 56 percent of Nikkei companiesundershooting market expectations, according to Thomson ReutersStarMine data. That compared with 54 percent in the previousquarter.    Market participants said the improved sentiment towardsJapanese equities, which have been underweight by many globalinvestors, would likely prompt foreign investors to return tothe Japanese market.    Investor demand for Nikkei call options, which essentiallybet on the index to trade higher, was brisk, exceeding demandfor put options.    According to Reuters data, Thursday's most-traded Nikkeiindex option was a call with a strike price of 9,750, a 4.1percent upside from Thursday's close, and a December maturity.    The next most-traded was a December call at 10,000, followed by another December call at 9,500 and a December put at 9,000.            GETTING INTO THE GAME    &amp;quot;Foreigners have just started to pour in new, long money.Many of them are still underweight on Japanese stocks, but theyfear that if they remain underweight, there is risk of losingbecause they believe that Japanese stocks will outperform theirglobal peers,&amp;quot; said Tetsuro Ii, chief executive officer ofCommons Asset Management.    &amp;quot;We've been getting questions from foreign investors askinghow far the Bank of Japan will likely give in to Abe's demands.&amp;quot;    Shinzo Abe, the leader of the main opposition party LiberalDemocratic Party (LDP), has called for more extreme measuresfrom the central bank, including setting a 2 percent inflationtarget, to pull the export-reliant economy out of deflation.    The latest data from Japan's Ministry of Finance showedforeign investors turned net buyers of Japanese stocks last weekafter three weeks of net selling. They bought a net 133.3billion yen ($1.6 billion) of shares in the week through Nov.17.    Jun Yunoki, equity analyst at Nomura Securities, saidJapanese retail investors were more likely to be sellers in thisrally.    &amp;quot;Usually they are slow buyers. If the market starts heatingup, they will start buying,&amp;quot; he said.    &amp;quot;People who have suffered losses in their margins will usethis opportunity to sell. I think it will take a little bit moretime for retailer investors to massively buy.&amp;quot;    The upbeat sentiment also pushed Japan's top brokerageNomura Holdings up 6.2 percent to a near seven-monthhigh and rival Daiwa Securities 4.6 percent higher.    The broader Topix climbed 1.2 percent to 776.43 to afour-month closing high in active trade, with 2.03 billionshares changing hands, up from Wednesday's 1.87 billion and lastweek's average of 1.79 billion.    Adding to the positive mood from the weaker yen, data fromThomson Reuters I/B/E/S showed the pace of deterioration inJapanese companies' earnings outlooks has slowed slightly inNovember.    Their one-month earnings momentum -- analysts' earningsupgrades minus downgrades as a total of estimates -- stood at-10.9 percent, versus -12.2 percent in October."^^<http://www.w3.org/2001/XMLSchema#string>
<http://in.reuters.com/article/markets-japan-stocks-idINL5E8MM0LL20121122>