Nikkei reaches one-week high on raised hopes for U.S. recovery
* Nikkei may stay strong until mid next week-analyst * Weak yen boosts exporters, with Honda up 3.3 pct * Sharp almost doubles net loss forecast, stock falls * Sony up after small Q2 profit, keeps annual guidance By Ayai Tomisawa TOKYO, Nov 2 (Reuters) - Japan's Nikkei share average climbed to a one-week high Friday as global cyclical shares such as carmakers rose on improved U.S. economic data. The Nikkei rose 1.2 percent to 9,051.22, ending above the 9,000 mark for the first time in a week. The index gained 1.3 percent for the week. Improved U.S. consumer confidence and private-sector jobs data lifted sentiment ahead of U.S. non-farm payroll figures due later on Friday. The news lifted the dollar against the yen , which was quoted at 80.25 yen to the dollar, boosting the appeal of Japanese exporters. Honda Motor Co climbed 3.3 percent to 2,467 yen and Nissan Motor Co gained 2.1 percent. The broader Topix index also added 1.2 percent on Friday, to 752.09. Analysts say that exporters may stay strong until the middle of next week, helped by the weaker yen. "The Nikkei may stay above the 9,000 mark until Tuesday's U.S. presidential election," said Hikaru Sato, a senior technical analyst at Daiwa Securities, adding that investors "wouldn't want to change their positions drastically until the big event is over." He said that investors may stay slightly positive, but after the election, they will look carefully at what the next leader can do to improve the labor market. 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. 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 results undershooting market expectations, data from Thomson Reuters StarMine showed. That compared with 54 percent in the previous quarter. Struggling TV maker Sharp Corp. fell 2.4 percent to 165 yen after warning it might not be able to survive. The company, whose stock had Friday's highest volume, almost doubled its full-year net loss forecast to $5.6 billion. Goldman Sachs, in a note that kept a "sell" rating, said that even if Sharp can improve its free cash flow and keep getting bank support, the shares "are overvalued given profit dilution from a potential capital raise." Panasonic Corp, another consumer electronics maker, dropped 0.7 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. The stock had Friday's highest turnover. Sony Corp eked out a small quarterly operating profit, helped by the sale of a non-core chemicals business. It kept its forecast for a full-year operating profit of 130 billion yen, sending its shares up 2.1 percent to 934 yen. Among many companies which cut their annual earnings guidance were Nikon Corp and printed circuit boards maker Ibiden Co Ltd. Nikon lost 6.1 percent to 1,928 yen and Ibiden sank 8.6 percent to a nine-year low. The benchmark Nikkei is up 7.0 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. Volume on Friday was 1.88 billion shares, above Thursday's 1.85 billion and 17 percent higher than the daily average over the past 90 days.
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