Tokyo stocks rise as yen's retreat lifts exporters

20:09, May 27, 2010      

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Tokyo stocks advanced Thursday with the Nikkei average climbing 1.23 percent following a six-month closing low the previous day as a weakening yen gave exporters a boost, easing concerns about Europe's debt woes.

The 225-issue Nikkei Stock Average rose 117.06 points from Wednesday to 9,639.72, in its best one-day performance in two weeks, having hit a six-month intraday low of 9,395.29.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 10.89 points, or 1.27 percent, to 869. 89.

Brokers said market sentiment was lifted Thursday as other Asian market shares gained and U.S. stock futures rose, but some reluctance still remained over buying risky assets.

"We're seeing short-covering of a lot of shares, large cap shares, that were sold on euro zone worries, with buying in futures and a weaker yen providing an additional boost," said one Tokyo-based market analyst.

"Given that the Nikkei was oversold, there may be a bit of a rebound getting going here. But there's still a lot of concern about Europe, especially Spain, with the impact of any troubles there likely to be much larger than those of Greece."

The overall consensus, however, was that the euro's rise was the catalyst to buyback shares that had previously been oversold during a broad scale sell off period sparked by concerns over financial institutions in Spain and persistent worries about Europe's debt crisis that battered the region's single currency.

"The euro's recovery to the 110 yen zone provided a cue to buy back shares," commented one technical analyst in Tokyo.

"Since the real global economy is good, some investors see an end to European debt issues in the near future," added another.

The yen weakened to as low as 110.96 per euro Thursday, compared with 109.64 at the beginning of trade.

Many Japanese exporters have set their currency assumption rates for euro-yen at between 120 and 125 yen

Against the dollar, the Japanese currency depreciated to as much as 90.32 from 89.99, giving export-related issues a boost as a weaker yen adds to the competitiveness of Japanese firms reliant on foreign markets for profits.

Sony Corp. rose 2.1 percent to 2,788 yen and Canon Inc. climbed 2.1 percent to 3,680 yen.

Honda Motor Co. Ltd. gained 1.2 percent to 2,775 yen and Toyota Motor Corp. advanced 1.1 percent to 3,275 yen,

Industrial robotics maker Fanuc Inc. jumped 3.2 percent to 9, 240 yen after Credit Suisse upgraded the firm's stock price estimate to 13,500 yen from 11,000 yen, saying its shares were undervalued. Credit Suisse maintained its "outperform" rating on the firm.

Following news of a joint venture with Hitachi to produce smart grid technology, Osaki Electric Co. Ltd. leapt 7.4 percent to 744 yen.

Komatsu Ltd., a maker of industrial construction machinery, rose as Shanghai stocks made up lost ground, the firm who counts China as its largest market gained 3 percent to close at 1,666 yen.

Japanese shipping lines added to gains made Wednesday on the recent surge of The Baltic Dry Index, which tracks rates to ship dry commodities with Mitsui O.S.K. climbing 3 percent to 649 yen and Nippon Yusen K.K., Japan's largest shipping line, adding 1.6 percent to 327 yen.

Meanwhile, Kawasaki Kisen Kaisha Ltd., the nation's third- biggest shipping line, jumped 4.7 percent to 358 yen.

Some 2.39 billion shares changed hands on the Tokyo exchange's First section, down from the previous session's volume of 2.65 billion shares. Advancing issues outnumbered declining ones by 953 to 607.

Source: Xinhua

(Editor:王寒露)

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