Nikkei extends highest level
City Index May 20, 2013 1:45 PM
<p>The Japanese government has raised its growth outlook for the first time in two months, while the index has also been boosted by positive data emerging from the US. </p>
The Nikkei share average has climbed to its highest level since December 2007 today (May 20th), following further weakening of the yen and optimism regarding the Japanese economy.
Having been as high as 15,381.74, the Nikkei .N225 closed at 15,360.81 – 1.5 per cent higher for the day.
Since the turn of the year, the index has gained 48 per cent, with more than eight per cent added since the US dollar broke through the 100 yen threshold on May 9th.
A monthly report from the government indicated the Japanese economy is showing signs of steady recovery, upgrading its forecast for growth.
While much of this has been a result of prime minister Shinzo Abe's aggressive monetary policies, positive data emerging from the US – the world's largest economy – has also helped to improve trader sentiment. On Friday, both the Dow Jones and S&P 500 closed at record highs.
This has helped to boost the Nikkei as the US is Japan's biggest market for exports and traders are predicting the market will move even higher.
Hiroyuki Fukunaga, chief executive of Investrust, told Reuters: "In the next few days, the Nikkei's levels at 15,600 and higher are in sight."
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