Nikkei posts biggest one-day gain in five months

Fri Sep 7, 2012 2:53am EDT

* Nikkei rises 0.4 pct this week, ending a 2-week losing run
    * Exporters boosted, yen softens against euro
    * Toshiba jumps on NAND flash shortage
    * Japan Tobacco sinks on potential French tobacco tax hikes

    By Dominic Lau
    TOKYO, Sept 7 (Reuters) - Japan's Nikkei average climbed 2.2
percent on Friday, its biggest one-day percentage gain in five
months, after the European Central Bank outlined its bond buying
scheme in an attempt to draw a line under the region's debt
crisis.
    Stronger-than-expected jobs data from U.S. private sector,
which bode well for the key U.S. non-farm payroll figures due
out on Friday, also encouraged investors to cover their bearish
bets.
   The jump helped the Nikkei scramble into positive
territory for the week, adding 0.4 percent to snap a two-week
losing run on concerns over sputtering growth in China, Japan's
largest exports market. It has risen 4.9 percent this year.
    "The ECB gave investors what they were hoping for, which is
obviously positive for equities," said Masayuki Doshida, senior
market analyst at Rakuten Securities.
    "However, doubts will remain about the details -- the
necessary criteria, the time frame, a target for German bond
yield spreads."
    The Nikkei advanced 191.08 points to 8,871.65, breaking
above its 75-day moving average at 8,773.26 but failing to push
through resistance at 8,881, the 38.2 percent retracement of its
rally from July 25 to Aug. 20.
    The broader Topix climbed 2.3 percent to 735.17 and
trading volume hit its highest in four weeks, with 1.97 billion
shares changing hands. 
   
    CHIPS AND EXCAVATORS
    A rallying euro against the yen helped exporters, with
Toyota Motor Corp up 3.4 percent, industrial robot
maker Fanuc Corp adding 2.6 percent and Canon Inc
 rising 4.6 percent.
    Toshiba Corp, a maker in NAND flash chips, surged
7.3 percent after OCZ Technology Group Inc, a
solid-state drive maker, said it faced a significant shortage in
certain NAND flash components used in making some of its
products.
    A source also said Apple Inc has reduced its order
for memory chips for its new iPhone from Samsung Electronics Co
, instead picking Toshiba and other competitors as
its suppliers. 
    Sharp Corp rose 3 percent after sources at its
lenders said banks are hammering out a refinancing plan for the
embatled TV maker without waiting for Taiwan's Hon Hai Precision
Industry to agree to buy a stake in the Japanese firm
as talks betwen the Apple Inc suppliers pause.
 
    Other notable gainers included Komatsu Ltd and
Hitachi Construction Machinery Co Ltd, up 6.6 and 4.7
percent respectively, after China gave the greenlight for 60
infrastructure projects this week. 
    Japan Tobacco Inc sagged 4.3 percent and was the
third-most traded stock on the main board by turnover after the
French government said it was considering raising the tobacco
tax by 6 percent in October. Japan Tobacco had a 16.4 percent
share of the French market as of December 2011.
    
    UNCERTAINTIES AHEAD
    ECB president Mario Draghi, backing up his July pledge to do
whatever it takes to defend the euro, said the central bank's
plan for bond-buying would address bond market distortions and
"unfounded" fears of investors about the survival of the single
currency. 
    Germany's constitutional court has still to rule on the
proposed European Stability Mechanism rescue fund next week,
which may stymie the ECB's ability to help indebted nations.
    "Germany could yet throw a spanner in the works, which means
the bond-purchasing plan is seen in a negative light by next
week," cautioned Makoto Kikuchi, CEO at Myojo Asset Management.
    "The Nikkei's gains will also be limited unless the U.S.
jobs figures exceed market expectations today."
    Economists in a Reuters poll forecast a 125,000 jobs were
created in August compared with 163,000 new jobs in July, and
the unemployment rate is seen at 8.3 percent, a repeat of the
July rate.
    "There is still a lot of uncertainties ... There are still a
few macro events between now and the end of the year," said Kwok
Chern-yeh, director and head of investment at Aberdeen
Investment Management in Tokyo.  
    But he said he was looking out for well-run companies, which
can weather the ups and downs of the business cycle, adding
Canon and Unicharm Corp, maker of disposable diapers
and sanitary napkins, were among their top holdings.
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