Nikkei climbs to 1-week high ahead of BOJ, U.S. jobs

Thu Oct 4, 2012 8:59pm EDT

* BOJ expected to stand pat
    * Seven & I suffers as weaker supermarket sales hurt

    By Dominic Lau
    TOKYO, Oct 5 (Reuters) - Japan's Nikkei stock average hit a
one-week high on Friday morning, tracking gains on Wall Street,
ahead of the outcome of a Bank of Japan policy meeting and key
U.S. jobs data.
    The Nikkei advanced 0.6 percent to 8,875.07, just
breaking above its 75-day moving average at 8,873.40.
    The index rose 0.9 percent on Thursday, snapping a four-day
losing run, as sentiment was boosted by a strong showing by the
pro-business U.S. Republican candidate, Mitt Romney, in his
first debate with President Barack Obama, dealers said.
    "The market is still very volatile. The real estates were a
good sector yesterday. They are not so good today. Within the
market, the sector movement is quite sharp and temporary," a
senior trader at a foreign bank said.
    The real estate sector was flat after surging 2.8
percent on Thursday, while Toyota Motor Corp slipped
0.8 percent after climbing 3 percent in the pervious session.
    The Yomiuri newspaper said Toyota's sales in China halved
last month from August levels as anti-Japan sentiment in a row
over disputed islands in the East China Sea took its toll.
 
    Rival Nissan Motor Co lost 1 percent.      
    Overnight, the U.S. S&P 500 extended gains to a
fourth day, putting it on the cusp of a new five-year high if
Friday's jobs report shows encouraging signs for the labour
market.
    Economists in a Reuters survey forecast 113,000 jobs were
created in September compared with 96,000 jobs created in
August, while the unemployment rate is seen at 8.2 percent,
versus 8.1 percent in August.
    Another trader said the market was likely to take a positive
view on the nonfarm payrolls data whether it was good or bad.
    He said if it came above expectations, it would give some
relief to the market on the basis that the U.S. labour market is
improving, while if the figure disappointed, it could strengthen
Romney's bid for presidency. 
    But before that, the BOJ is expected to keep monetary
settings unchanged to spend some time reviewing the effect of
its policy loosening last month. Weakening manufacturing
activity in Asia, however, continues to cloud the outlook.
 
    Seven & I Holdings Co lost 2.5 percent after its
quarterly profit fell 2.5 percent as weaker sales at its
supermarkets offset growth from its convenience stores, leading
Japan's top general retailer to pare its annual outlook.
 
    But Ryohin Keikaku Co Ltd, which produces and sells
clothing and household goods, climbed 3.9 percent after it
raised its operating profit forecast for the year ending
February 2013 on the back of solid first-half earnings.
    The quarterly earnings season will move into high gear in
the next two to three weeks. Investors were disappointed with
the previous quarterly earnings, when 54 percent of Nikkei
companies reported results below analysts' expectations.
    For this quarter's results, SmartEstimates from Thomson
Reuters StarMine expects an average negative earnings surprise
of 1.2 percent.        
    The broader Topix index added 0.3 percent to 737.53.
    The benchmark Nikkei is up 5 percent so far this year,
trailing a 16.2 percent rise in the S&P 500 and an 11 percent
gain in the pan-European STOXX Europe 600 index.
    Japanese equities are slightly more expensive than their
European peers, with a 12-month forward price-to-earnings ratio
of 11.4 versus STOXX Europe 600's 11.1, according to Thomson
Reuters Datastream. The S&P 500's 12-month forward P/E stands at
12.8.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.