Nikkei rises 1.3 pct to 1-week high ahead of U.S. jobs data
* Sony up after posting small Q2 profit, keeps annual guidance * Sharp almost doubles net loss forecast, stock falls * Weak yen boosts exporters, with Honda up 3.4 pct By Dominic Lau TOKYO, Nov 2 (Reuters) - Japan's Nikkei share average climbed 1.3 percent to a one-week high on Friday as improved U.S. consumer confidence and private-sector jobs data lifted sentiment ahead of U.S. non-farm payroll figures later in the day. The news lifted the dollar against the yen, which was quoted at 80.275 yen to the dollar, boosting the appeal of Japanese exporters. Among them, Honda Motor Co climbed 3.4 percent and Nissan Motor Co gained 1.9 percent. Gains in Sony Corp, after it posted a small operating profit in the second quarter and kept its full-year profit guidance, also lent strength to the market. By the midday break, the Nikkei advanced 117.33 points to 9,064.20, trading above the 9,000 mark for the first time in a week, but faced resistance at its 200-day moving average of 9,070.62. "The Japanese yen is getting softer and softer ... There is a tug-of-war between the uncertain macro outlook and corporate earnings and the weaker yen," said Yasuo Sakuma, portfolio manager at Bayview Asset Management. "I don't expect a big correction for the time being but the upside completely depends on the Japanese yen," Sakuma said, adding he expected the Nikkei to trade between 8,500 and 9,200 for a while yet. Sony rose 3.1 percent and was the third-most traded stock on the main board by turnover. But Sharp Corp suffered a 4.1 percent loss after the struggling TV maker warned it might not be able to survive on its own as it almost doubled its full-year net loss forecast to $5.6 billion. If Sharp shares were to finish the day at current losses, they would fall to their lowest close since late 1975, according to Thomson Reuters Datastream. "We believe Sharp needs to improve free cash flow and bolster capital, but even assuming FCF improves and banks continue to provide financial support, we think the shares are overvalued given profit dilution from a potential capital raise," Goldman Sachs said in a note and kept a 'sell' rating. Japanese electronics makers, which dominated the industry in the 1980s and 1990s, have been losing their competitive edge to rivals like Apple Inc and South Korea's Samsung Electronics Co Ltd. Panasonic Corp, another consumer electronics maker, eased 0.5 percent, extending the previous session's 19.5 percent slide after it forecast a $9.6 billion net loss for the business year, nearly matching last year's record net loss. It was the most traded stock. WEAK QUARTERLY EARNINGS Quarterly company earnings have been weak so far amid spluttering global growth, with 59 percent of the 90 Nikkei companies that have reported quarterly earnings undershooting market expectations, data from Thomson Reuters StarMine showed. That compared with 54 percent in the previous quarter. Many companies have also cut their annual earnings guidance. Among them were Nikon Corp and printed circuit boards maker Ibiden Co Ltd. Nikon lost 5.5 percent and Ibiden sank 7.6 percent to a nine-year low. The broader Topix index rose 1.2 percent to 751.87 after data from payroll processor ADP showed U.S. companies added 158,000 jobs in October - the fastest pace in eight months - and U.S. consumer confidence jumped last month to its highest in more than four years. Economists surveyed by Reuters forecast 125,000 jobs were created in the United States last month compared with 114,000 jobs created in September, while the unemployment rate is seen at 7.9 percent versus 7.8 percent in September. A dealer said investor demand for Nikkei call options outnumbered demand for put options ahead of the nonfarm payroll data. The most popular November call options had a strike price of 9,250 and 9,500. Trading was relatively active on the Topix, with volume at 59 p ercent of its full daily average for the past 90 days. The benchmark Nikkei is up 7.2 percent this year, trailing a 13.5 percent rise in the U.S. S&P 500 and an 11.9 percent gain in the pan-European STOXX Europe 600 index. Still, Japanese equities are more expensive than their European peers, with a 12-month forward price-to-earnings ratio of 11.6 versus STOXX Europe 600's 10.9, according to Datastream. The S&P 500 carries a 12-month forward P/E of 12.6.
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