Nikkei gains on weaker yen, but stays trapped in range

By Antoni Slodkowski

TOKYO, March 30 (Reuters) - Japan's Nikkei average made
modest gains on Wednesday after the dollar rose against the yen,
but remained tethered in a narrow range for a seventh straight
session amid little progress at the crippled nuclear plant.

The dollar rose to 82.51 yen on Tuesday, its highest
in more than two weeks and above the 81.98 peak of March 18, the
day Japanese authorities intervened to stop runaway yen gains.

That lifted post-quake underperformers like Nissan Motor
which added 1.1 percent. Nissan has lost almost 13
percent since the earthquake and tsunami hit Japan over two
weeks ago.

Both Nissan and Toyota Motor Corp , which have
suffered much of loss of domestic production due to disruptions
in the supply chain, were among the most actively traded shares
by turnover on the Tokyo stock exchange's main board.

"Investors are taking heart from gains in the yen and
stronger overseas stocks, but with the nuclear situation so
volatile, the index won't go higher any time soon," said
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ
Morgan Stanley Securities.

The Nikkei has stayed trapped in a narrow range around 9,500
for seven days.

"Foreigners took advantage of cheaper stock prices when the
index was at levels around 8,000, but once it goes above 9,500
they're much more reluctant to buy more aggressively," said
Fujito.

The Nikkei gained 0.5 percent, or 48.76 points, to
9,506.36. The broader Topix index advanced 0.2 percent
to 851.53.

Japanese shares have lost about 9 percent since the March
11 earthquake and tsunami, and a subsequent nuclear safety
crisis, triggered the biggest two-day rout in the market since
1987. In contrast, the MSCI index of Asian shares outside Japan
has gained 3.7 percent.

Analysts said they expect the benchmark Nikkei to move
between 9,400 and 9,600 on Wednesday.

Shares of Tokyo Electric Power slid another 12.7
percent on Wednesday, on top of a 47-year low hit a day earlier
as the government pondered whether to nationalise the operator
of a stricken nuclear plant.

Tokyo Electric's shares fell as low as 494 yen from
Tuesday's close of 566 yen, before recovering a little to trade
at 504 yen, down 10.8 percent.

The dollar rose as a steady rise in U.S. yields gained
traction this week as several Federal Reserve policymakers said
the central bank would have to start tightening monetary policy
soon to avoid inflation.

Shares of Hitachi Ltd jumped 5.5 percent to 424
yen, helped by a Nikkei newspaper report that the electronics
giant has partially resumed operations at its biggest factory
complex with output expected to return to pre-disaster levels
next month.[ID:nL3E7ET31A]
(Additional reporting by Chikafumi Hodo; Editing by Edwina
Gibbs)

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