August 12, 2016 / 2:52 AM / 2 years ago

Nikkei takes cue from Wall Street records, on track for weekly gain

* Nikkei up more than 3 pct for the week

* Expectations of BOJ ETF buying support sentiment

TOKYO, Aug 12 (Reuters) - Japan’s Nikkei share average rose on Friday, on track for a robust weekly gain, as records on Wall Street and a weaker yen lifted sentiment.

Markets in Japan were closed on Thursday for a public holiday, with some participants opting to take Friday off as well.

The Nikkei was up 0.7 percent at 16,856.27 at the end of morning trade. It rose as high as 16,902.71 earlier, its highest since July 21, and was poised to gain 3.7 percent for the week.

All three major U.S. stock indexes closed at record highs on Thursday for the first time since 1999, with the Dow Jones industrial average climbing 0.6 percent.

“The Dow reaching a high encourages more buying in the Tokyo stock market,” said Hiroki Allen, chief representative of Superfund Japan in Tokyo.

A weaker yen also gave a tailwind to the market. The dollar rose 0.2 percent to 102.15, up 0.3 percent for the week.

The Bank of Japan bought 70.7 billion yen ($693 million) of exchange traded funds on Wednesday, suggesting the central bank plans to buy ETFs about once every three days rather than buying more frequently.

The central bank said late last month that it would increase ETF purchases so its total holdings increase at an annual pace of 6 trillion yen, up from its previous pace of 3.3 trillion yen.

“Looking ahead, expectations of BOJ ETF buying will support the market,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

The central bank has said that ahead of its meeting next month, it will undertake a “comprehensive” review of its policies. It has already prepared a preliminary outline that will maintain a pledge to hit its 2 percent inflation target as soon as possible, sources familiar with its thinking said.

Shares of Sharp Corp surged 15.7 percent after Taiwan’s Foxconn said China’s anti-monopoly authorities have approved its acquisition of the Japanese electronics manufacturer.

Toshiba Corp saw its shares rise 4 percent after the company said it plans to report later on Friday first-quarter financial results that are “close to” figures reported by the Nikkei business daily, which put Toshiba’s operating profit at about 20 billion yen.

Shares of Shikoku Electric Power rose 6.5 percent after the Nikkei reported the No. 3 reactor at the utility’s Ikata power plant was expected to resume work on Monday. The resumption is expected to lift its annual operating profits by 25 billion yen, the report said.

Beleaguered Japan Display continued to skid, losing 6.7 percent, after it reported a wider loss earlier this week and sought financial support from its biggest investor as smartphone sales slow.

The broader Topix was up 0.3 percent at 1,319.03, while the JPX-Nikkei Index 400 also rose 0.3 percent to 11,873.41. ($1 = 102.0300 yen) (By Tokyo markets team; Editing by Eric Meijer)

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