Nikkei returns to 16,000 level as exporters gain

Tokyo, May 29: The Nikkei share average rose above 16,000 for the first time in a week on Monday, advancing 0.25 percent as shares of exporters such as Sony gained ground on a weaker yen.

Shares of steel makers such as Nippon Steel Corp. gained after European steel firm Arcelor said it would buy Russia's Severstal, sparking hopes that industry consolidation would boost steel makers' pricing power.

''The return to 16,000 is a bit of a relief for the market,'' said Katsuhiko Kodama, senior strategist at Toyo Securities.

''The yen right now is continuing to remain comparatively weaker.... That is helping exporters.'' The Nikkei was up 39.76 points at 16,010.52 as of 0105 GMT, rising above 16,000 for the first time since May 22.

The broader TOPIX Index was up 0.57 percent at 1,622.77.

Electronics and entertainment conglomerate Sony gained 1.3 percent to 5,280 yen. Fellow exporter Honda Motor Co. Ltd. added 1.1 percent to 7,520 yen.

The yen was at 112.42 to the dollar in early Asian trade, well below its recent high of 108.96 hit earlier this month.

A weaker yen is a boon for Japanese exporters, as it boosts profits when earnings from abroad are brought home.

Japanese steel makers followed advances by their European counterparts, after Arcelor said it would buy Russia's Severstal, to form the world's largest steel maker.

Japan leader Nippon Steel gained 1.6 percent to 435 yen. JFE Holdings Inc. advanced 3.1 percent to 4,930 yen.

Tokyo Steel Manufacturing Co. Ltd. rose 4.1 percent to 2,535 yen.

Shares of railway operator Hankyu Holdings Inc. jumped 9.5 percent to 634 yen after it said it would launch a tender offer for fellow railway firm Hanshin Electric Railway Co.

Hanshin Electric was down 0.9 percent at 931 yen.

REUTERS