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

08:44, August 19, 2010      

Email | Print | Subscribe | Comments | Forum 

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.



  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Staff members watch a screen showing the blast-off of the Long March-2FT1 carrier rocket loaded with Tiangong-1 unmanned space lab module at Beijing Aerospace Control Center, Sept. 29, 2011. Commander-in-chief of China's manned space program Chang Wanquan announced Thursday night that the launch of Tiangong-1 space lab module was successful. (Xinhua/Wang Shen)
  • Chinese President Hu Jintao watches the launch of Tiangong-1 space lab module at Beijing Aerospace Control Center in Beijing, capital of China, Sept. 29, 2011. Other members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, including Wu Bangguo, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang and Zhou Yongkang, are also present. (Xinhua/Rao Aimin)
  • The graphics shows the launch procedures of the carrier rocket of Tiangong-1 space lab module, Long March-2FT1 on Sept. 29, 2011. (Xinhua/Lu Zhe)
  • Image taken from Beijing Aerospace Control Center shows a Long March-2FT1 carrier rocket loaded with Tiangong-1 unmanned space lab module blasting off from the launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Sept. 29, 2011. (Xinhua)
  • On Sept. 28, tourists travel around the Mingshashan Scenic Area in Dunhuang, Gansu province by camel. With the National Day vacation right around the corner, more and more tourists from home and abroad are going to Dunhuang. Riding on a camel, they travel in the desert to enjoy the cities rare form of natural scenery. (Xinhua/Zhang Weixian)
  • Chinese forest armed forces work together with forest firefighters on Sept. 28. (Xinhua/Chai Liren)
Hot Forum Discussion