Toyota, Honda, Nissan shares surge as Japan halts yen rise

Toyota, Honda, Nissan shares surge as Japan halts yen rise

September 15, 2010 - 9:00 am ET

TOKYO (Reuters) -- The Nikkei stock average today jumped 2.3 percent to a one-month closing high after Japan intervened to weaken the yen, boosting shares of Toyota, Honda, Nissan and other exporters.

Japan intervened to sell yen for the first time in six years, bringing the currency off 15-year highs against the dollar.

The action lifted the Nikkei out of negative territory and the index surged as much as 3 percent at one stage.

Automakers rose across the board with Toyota Motor Corp. surging 3.8 percent to 3,010 yen and Honda Motor Co. advancing 4 percent to 2,944 yen. Nissan Motor Co. gained 3.7 percent to 702 yen.

"The Japanese economy depends heavily on what it earns from exports overseas, so the intervention came at a good time and had an impact after a string of verbal threats," said Tomomi Yama$h!a, a fund manager at Shinkin Asset Management.

"Corporate performance hasn't been bad but the dollar hovering near 80 yen had made shares unattractive. The authorities were able to put their foot down in the markets, and the next question is can they follow through with steps to help the economy."

The benchmark Nikkei gained 217.25 points to 9,516.56 after earlier dropping as low as 9,199.08. The dollar traded at around 85.00 yen after hitting a 15-year low of 82.87 yen.

That earlier rise in the yen followed a Japan ruling party vote victory on Tuesday by Prime Minister Naoto Kan over rival Ichiro Ozawa, who had been more strident in his calls to intervene to weaken the yen.

The intervention in the foreign exchange market sent short-term speculators scurrying to cover short positions in stock futures, market players said.

"The key points for the stock market going forward are if the Nikkei can remain on an uptrend once the short-covering in futures peters out," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

"That in turn may depend on whether the yen remains on a weaker footing. The point here is that the yen hasn't strengthened on domestic factors alone -- the easing stance by the United States and low U.S. yields have played a key part as well."

The Nikkei was looking bullish on the technical charts, having risen above resistance at 9,455, around its 75-day moving average and previously considered a strong resistance point.

It also pierced above 9,500, around the bottom of its Ichimoku cloud. Ichimoku charts are popular with Japanese traders.

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