Nikkei rises on firm earnings, strong yen caps gains

21:53, August 02, 2010      

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Tokyo stocks rose higher Monday as the market began to respond to positive corporate earnings although the yen's appreciation and ongoing fears about the health of the U.S. economy prevented further gains.

The 225-issue Nikkei Stock Average ended up 33.01 points, or 0. 35 percent, from Friday at 9,570.31, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 1. 19 points, or 0.14 percent, at 850.69.

Strong individual reports by companies such as Honda, Hitachi and Tokyo Election gave the market a boost early on, but gains were capped as the yen advanced against the U.S. dollar and Friday 's U.S. GDP data weighted on the market mood.

The U.S. economy grew at an annualized rate of 2.4 percent in the April to June period, a much slower pace than the revised 3.7 percent expansion in the preceding quarter, the Commerce Department said.

The highly anticipated data came on the back of recent weaker- than-expected economic indicators that had already raised investor concern that the recovery is stalling, brokers said.

"U.S. GDP fell a bit but it was basically within expectations, and while there's still concern about the pace of the U.S. economic recovery, the moves today basically are just a reflection of strong Japanese earnings," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"Individual company earnings were taken positively, but it's hard for buy orders to spread," said one strategist.
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