Nikkei seen advancing as easing hopes sustain gains
TOKYO, Oct 26 (Reuters) - Japan's Nikkei share average is expected to rise on Friday, supported by expectations of significant easing by the Bank of Japan, while investors appear to have priced in cuts to profit forecasts in the current earnings season. Market players said the Nikkei was likely to trade between 9,000 and 9,150 after the benchmark hit a four-week closing high of 9,055.20 on Thursday as hopes for BOJ action softened the yen to a four-month low against the dollar, buoying exporters. "The yen has gained a solid foothold above 80 versus the dollar, so we'll continue to see the positive effects of a weaker yen," said Kenichi Hirano, operating officer at Tachibana Securities. "Expectations of the BOJ easing are running very high - it's markedly different to previous months." Overnight, Apple Inc and Amazon joined the ranks of U.S. tech and internet firms reporting earnings that fell short of expectations, causing their shares to fall in extended-hours trading. Just 36.3 percent of S&P 500 companies have beaten revenue expectations this season, compared with a historic average of 62 percent. While earnings from Japanese firms have hardly been stellar - 9 out of the 12 Nikkei companies reporting so far have undershot expectations - disappointments have largely been priced in, while the weaker yen has softened the fall for companies with poor results. Nikkei futures in Chicago closed at 9,075, up 5 points from the close in Osaka. The Nikkei added 1.1 percent to 9,055.20 on Thursday, breaking above its 5-day moving average at 9,007.43, but it faced resistance at its 200-day moving average of 9,056.05. > Wall St manages slim gain, Apple falls after results > Dollar at 4-month high vs yen; euro down for 3rd day > Prices drop on growth hopes after weak auction > Gold rebounds above $1,700/oz on economic optimism > Oil rises, products find support from Hurricane Sandy STOCKS TO WATCH -AEON CO Aeon Co Ltd is to buy out Carrefour SA's Malaysian subsidiary for just over 20 billion yen ($250 million) to take control of its 26 large supermarkets there, in addition to the 29 it already holds, according to the Nikkei business daily. -ADVANTEST CORP Advantest Corp lowered its operating profit forecast for the year ending March 2013 after Thursday's close to between 6 billion yen ($75 million) and 16 billion yen ($200 million), down from a previous forecast of between 12 and 20 billion yen. -CANON INC Canon cut its full-year outlook and posted a weaker-than-expected quarterly profit after sales were hit by boycotts of Japanese products in China on the back of a territorial dispute, adding to woes about slowing demand in Europe. -HITACHI CONSTRUCTION MACHINERY CO LTD Hitachi cut its operating profit forecast for the year ending March 2013 to 56 billion yen ($700 million), down from a previous forecast of 72 billion yen, and cut its sales forecast for the same period by nearly a tenth. An executive said that demand for excavators in China is unlikely to recover before March 2013.
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