Tokyo stocks rise as Greece debt fears recede

20:23, April 26, 2010      

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Japan's Nikkei average climbed 2.3 percent on Monday as investors' concerns about debt-stricken Greece lessened and a weaker yen against the euro and the U.S. dollar gave export-ralted issues a boost.

The 225-issue Nikkei Stock Average rose 251.33 points from Friday to 11,165.79, marking the highest closing level since April 15.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 18.51 points, or 1.89 percent, at 996. 71.

Brokers said that Greece's financial aid package, following Athens' formal request to the European Union and the International Monetary Fund for help, coupled with Wall Street's rise to a 19- month high lifted investor sentiment globally and such optimism was also felt in Tokyo on Monday and reversed last weeks trend towards selling.

"Late last week, concerns about Greek debt led Tokyo stocks to fall and with such concerns receding, both U.S. and European equities advanced, a trend that was inherited by Japanese stocks," said Masumi Yamamoto, a market analyst at Daiwa Securities Capital Markets Co., adding that the weakened yen also helped to increase risk appetite.

Other analysts pointed out that financial issues in the eurozone may not be over, with Spain and Portugal both showing signs of credit shortcomings and investors' while keeping on eye on factors in Europe were also eagerly awaiting Japanese firms' earnings reports due out this week.

"There does seem to be a lessening in risk aversion after Wall Street's performance on Friday, but whether this is sustainable remains to be seen," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

"It appears that Greece is getting aid, but whether this is the ultimate solution is a big question. Also, investors may be reluctant to buy the Nikkei much ahead of results later this week. "

"Investors will pay more attention to individual stocks with good earnings rather than the performance of the overall market as the earnings announcement season is picking up pace," added one Tokyo-based strategist.

Japanese exporters got a boost from the euro rising near the 126 yen line in Tokyo, as fears of a Greek default eased and the euro's strength also pushed the dollar into the lower 94 yen zone on Monday.

A weaker yen is cheered by exporters as profits made abroad are not diminished when repatriated.

Some domestic issues also gained on hopes for positive earnings as U.S. their counterparts like Xerox Corp. posted better-than- expected first quarter results and outlooks.

Canon Inc. advanced 3.5 percent to 4,395 yen, Ricoh gained 4.2 percent to 1,647 yen and Konica Minolta rose 4.6 percent to 1,168 yen.

Canon Inc. said after the 3 p.m. bell on Monday that its quarterly profit jumped more than fourfold on brisk demand for cameras and printers, and the company brought its full-year outlook closer to market expectations.

"Shares are rising on high expectations for robust results in companies' earnings and you can see this in the auto sector's advance, thanks to earnings news related to Toyota, as well as with Canon, which is rising ahead of its earnings report," Yamamoto said.

Toyota Motor Corp. jumped 120 yen, or over 3 percent, to 3,690 yen, due to reports over the weekend that the automaker is likely to report a group operating profit for the fiscal year ended March.

Value leader Toshiba Corp. rose over 2 percent to 545 yen, and IHI edged surged 7 percent to 172 yen, on a report in The Nikkei business daily that the two firms will form a joint venture in autumn to make core components for nuclear power plants.

Komatsu Ltd., the world's No. 2 maker of industrial dump trucks and excavators, rose 4 percent to 1,882 yen. Hino Motors Ltd. jumped 6.3 percent to 439 yen, posting its biggest gain since Sept. 24. The Nikkan Jidosha newspaper reported Hino Motors Ltd. expects a 23 percent increase in unit sales this year because of increasing demand from China.

Advantest Corp., the world's largest maker of memory-chip testers, gained 3 percent to 2,476 yen. The company may post 1 billion yen (10.61 million U.S. dollars) in operating profit for the three months ended March 31, which would be its first quarterly earnings since the period ended December 2007, The Nikkei said.

Some 2.08 billion shares changed hands on the Tokyo exchange's First section, up from Friday's volume of 1.99 billion shares.

Advancing issues outnumbered declining ones by 1,478 to 150.

Source: Xinhua


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