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Nikkei hits highest close for 3 months

JAPAN'S Nikkei stock average rose 0.3 percent on Friday, hitting a three-month closing high on increasing optimism about the United States economy and active foreign buying of blue-chip exporters such as Sony Corp.

The yen's retreat, which at one point saw the dollar bounce above the 100 yen mark, boosted car companies such as Honda Motor Co, which hit a six-month intraday high.

Kawasaki Kisen steamed 9.7 percent higher after Goldman Sachs initiated coverage with a "buy" rating and added it to its conviction list, saying Japan's shipping companies have a strong record of profitability. Other shippers gained as well.

More data raised hopes the US economic downturn is moderating, helping the benchmark Nikkei gain 1.4 percent on the week - its fourth consecutive positive week and the first such run since December. Last week's gains were the smallest, though.

However, some analysts had room for pessimism.

"Given that the Nikkei is still really low compared to where it was a year ago, it's clear that it will be difficult to change this long-term trend," said Tomomi Yamashita, a fund manager at Chibagin Asset Management.

Orders rising

US factory orders rose in February for the first time in seven months, boosting industrial, technology, consumer discretionary and energy stocks on Wall Street on Thursday.

Hopes for an improving global economy also grew after leaders of the G20 clinched a US$1.1-trillion deal on Thursday to combat the worst economic crisis since the Great Depression and said financial rules would be tightened to stop it happening again.

"I think it's pretty well confirmed that we've bottomed out," said Masayoshi Okamoto, head of trading at Jujiya Securities, who added he thought the Nikkei was likely to extend gains throughout this month and possibly into May.

"We're unlikely to see a V-shaped recovery, though, and (corporate earnings) results at the end of the month and into May could cap gains."

The benchmark Nikkei gained 30.06 points to 8,749.84, paring the day's gains to almost nothing but still marking its highest close since January 9.


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