Nikkei hits 5-month closing high, Toyota rise

Tokyo, Oct 26: The Nikkei share average booked its highest close in five months on Thursday, gaining nearly 0.7 percent as Honda Motor Co. Ltd. climbed after it lifted its earnings estimates and said it would pay a higher dividend.

Shares of Japan's largest and best-known companies continued to rise on expectations of solid earnings growth. Toyota Motor Co., the world's most profitable auto maker, set a record high for the third straight day.

Major firms Sony Corp., Nissan Motor Co. Ltd., Canon Inc. and Daiwa Securities Group Inc. were among those that reported earnings results after the close of trade.

''Right now we're seeing that there are a lot of solid results from corporate Japan,'' said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Securities Co. Ltd.

''The Nikkei appears to be gearing up to challenge the 17,000 mark. Whether that will happen this week or next I don't know ...

but if the Nikkei is going to head for 17,000, right now is a good opportunity for investors,'' Yamagishi said.

The Nikkei rose 0.67 percent, or 112.30 points to 16,811.60, its highest close since May 11. The broader TOPIX index advanced 0.68 percent to 1,664.59.

Advancing shares beat decliners 905 to 662.

Shares of Honda gained 2.2 percent to 4,160 yen.

While the company posted a surprise drop in quarterly net profit due to finance-related losses, Japan's third-largest auto maker raised its full-year forecasts on Wednesday to adjust for the weaker yen.

It also raised its full-year dividend forecast. The results prompted brokerage Deutsche Securities to raise its target share price by 500 yen to 4,900 yen.

Toyota Hits Record

Shares of rival Toyota hit a record of 7,120 yen soon after the opening, boosted by expectations that the world's most profitable auto maker will continue to benefit from growing global demand.

The issue finished the day up 0.6 percent, and with a market capitalisation of 25.63 trillion yen (5.8 billion).

That puts it well above the next-biggest company on the Nikkei 225, Mitsubishi UFJ Financial Group Inc., which has a market capitalisation of 16.47 trillion yen.

Rival Nissan edged up nearly 0.9 percent to 1,389 yen. After the close, the company posted a smaller-than-expected 4.9 percent drop in operating profits and kept its full-year forecasts, helped by a softer yen.

Trade volume edged down from the previous session, with 1.78 billion shares changing hands on the Tokyo exchange's first section. That was little changed from last month's daily average of 1.72 billion shares.

Reuters