Nikkei gains 0.86 pct as U.S. economic fears ease, new stimulus, yen moves eyed

08:44, August 19, 2010      

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Tokyo stocks rebounded from a three- day losing streak Wednesday, with the key Nikkei stock index advancing 0.86 percent as investors bought back shares deemed oversold as fears about the U.S. economy abated.

However, a persistently strong yen against the U.S. dollar and a highly anticipated meeting between Japanese Prime Minister Naoto Kan and Bank of Japan chief Masaaki Shirakawa, pegged for Monday, following the yen's rise to 15-year high logged against the U.S. dollar last week, sent some investors to the sidelines and capped gains, brokers said.

"The market is supported for now on expectations -- hope for the Kan-Shirakawa meeting, and hope that the government will do something to rein in the yen or provide economic stimulus," said Noritsugu Hirakawa, a strategist at Okasan Securities.

The 225-issue Nikkei Stock Average gained 78.86 points from Tuesday to close at 9,240.54, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 8.45 points, or 1.02 percent, at 835.23.

Analysts said that Wall Street's rise overnight following robust earning reports from retail behemoths Wal-Mart Stores Inc. and Home Depot Inc., underpinned the market Wednesday and data showing that industrial production in the U.S. far exceeded analysts' expectations lent further support.

Regarding the fluctuating nature of Tokyo's market sentiment as domestic and foreign macroeconomic data is forecast and released, cooperate earnings come in above or below median expectations and the yen's currency moves, investors are becoming increasingly angst, according to some market players.

"Investors are swinging from sorrow to joy with every tiny piece of economic data," said one local asset manager.

"Investors have been extremely sensitive."

Hiroshi Morikawa, a strategist in Tokyo at MU Investments, echoed these sentiments: "We'll stay in a wait-and-see position, cautious in case of a market drop."

"There's still concern about the U.S. economic recovery."

As crude oil for September delivery increased and The London Metal Exchange posted an increase of 1.7 percent yesterday, trading houses and commodity-related issues rose with Mitsubishi adding 2.5 percent to 1,885 yen.

Fellow trader Mitsui & Co., advanced 2 percent to 1,188 yen and Inpex Corp., Japan's No. 1 oil-exploration company, leapt 4.6 percent to 396,000 yen and had their stock rating raised from " sell" to "neutral" by MF Global Ltd.

Meanwhile JX Holdings Inc., Japan's largest oil refiner and copper producer, climbed percent to 470 yen.

Exporter shares were picked up on the dip, with Honda Motor Co. Ltd. rising 2.4 percent to 2,827 yen and Canon Inc., the world's largest maker of digital cameras, rising 1 percent to close at 3, 580 yen.

Nikon Corp. advanced 1.6 percent to 1,511 yen after Deutsche Securities raised its rating on the firm's stock to "buy" from " hold".

Precision motor maker Nidec Corp. was a notable gainer on Wednesday climbing 3.4 percent to 7,390 yen, following an announcement by the firm it plans to buy Emerson Electric Co.'s motors & controls business.

Japan's lenders faired well after a report in the Nikkei English News said some big names may set a merger ratio and under the plan, a new Sumitomo Mitsui Trust Holdings Inc. will be formed.

Subsequently, Sumitomo Trust & Banking Co. gained 3.3 percent to 468 yen and Chuo Mitsui Trust Holdings Inc. rose 2 percent to 313 yen.

Some 1.58 billion shares changed hands on the Tokyo exchange's First section, up from Tuesday's volume of around 1.29 billion, with advancing issues outnumbering declining ones by 1,134 to 401.

Source:Xinhua

(Editor:黄蓓蓓)

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