Nikkei set to rise as yen hits 7-mth low vs dollar

Tue Nov 20, 2012 6:15pm EST

TOKYO, Nov 21 (Reuters) - The Nikkei is expected to rise on
Wednesday, led by exporters after the yen hit a seven-month low
versus the dollar on expectations the Bank of Japan will be
pushed to take aggressive stimulus action under a new
government. 
    Liberal Democratic Party leader Shinzo Abe has called for
more extreme steps from the central bank, including "unlimited
easing", pushing interest rates below zero and directly
underwriting bonds issue to fund public works, to stimulate the
ailing, export-reliant economy.
    His comments ahead of a Dec. 16 election have whipsawed the
yen, which hit a seven-month low of 81.80 yen to the
dollar on Wednesday. A softer Japanese currency allows exporters
to earn more when they repatriate overseas earnings, as well as
increasing their competitiveness.
    The Nikkei was likely to trade between 9,150 and
9,300, strategists said, while Nikkei futures in Chicago closed at 9,215 on Tuesday, up 1 percent from the Osaka
 close of 9,120.
    "We don't expect to see big moves today, but the market will
likely rebound within a range," said Hiroichi Nishi, equity
general manager at SMBC Nikko Securities. "In terms of sectors,
exporters will be in focus because of the weaker yen."
    On Tuesday, the Nikkei dipped 0.1 percent to 9,142.64,
snapping a four-session rally driven by the weakening yen, while
the broader Topix was flat at 762.04.
    The benchmark Nikkei is up 8.1 percent this year, boosted by
a 5.7 percent rally from Nov. 14 to 19. Still, the Japanese
index lags a 10.4 percent rise in the U.S. S&P 500 and a
10.2 percent gain in the pan-European STOXX Europe 600 
index.
        
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    STOCKS TO WATCH
    --PANASONIC CORP 
    Moody's Investors Service cut Panasonic's long-term debt
rating by two notches to its lowest investment grade on Tuesday,
saying dwindling sales of its consumer electronic devices were
pressuring earnings. 
    --SHARP CORP 
    The struggling Japanese TV maker said on Tuesday about 3,000
of its workers volunteered for early redundancy, far more than
the 2,000 it aims to lay off in a bid to trim costs amid
mounting losses. 
    --ITOCHU CORP 
    Russian industrial giant EN+ signed an agreement with
Japanese trading firm Itochu to build a $500 million gas-powered
electricity generator that will almost double its Avtozavodskaya
power station output.
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