Nikkei seen advancing after steep drop in yen

Sun Jan 27, 2013 6:36pm EST

TOKYO, Jan 28 (Reuters) - Japan's Nikkei share average is
likely to take a leap at Monday's open after the yen weakened
over the weekend and U.S. stocks gained strongly, although
investors will be watching local earnings results for cues to
push higher.
    Market players said the Nikkei was likely to trade between
10,900 to 11,050 on Monday after the yen hit 91 versus the
dollar on Friday and 122.77 against the euro, spurring interest
in Japanese exporters whose revenues are set to expand once
repatriated. 
    Nikkei futures in Chicago closed at 10,970, up 0.4
percent from the close in Osaka of 10,930.
    "The potent mix of 'Abenomics' and strong risk appetite
abroad is continuing to soften the yen, which means investors
will still be buying stocks," said Masayuki Doshida, senior
market analyst at Rakuten Securities. 
    U.S. stocks finished strongly on Friday, with the S&P 500
striking a five-year high and hopping over the 1,500 mark, after
68 percent of the 147 S&P 500 companies that have reported
earnings so far exceeded expectations, above the 62 percent
average since 1994.
    "However, it may be difficult for investors to move before
they see how much the weaker yen will improve Japaneses
companies' performance," Doshida added.
    With Japan's earning season getting into full swing this
week, investors are hoping that the yen's more than 10 percent
fall against the dollar in the past two months will improve
Japanese companies' forecasts for the year to come.
    For industrial robots maker Fanuc Ltd, however,
which cut its operating forecast for the year ending March by
almost 20 percent to 178 billion yen ($2 billion) after the bell
on Friday, the yen effect looks to be outweighed by a slowdown
in China and the ongoing EU debt crisis in the
short-term. 
    Fanuc also said its operating profit for the nine months
ended December had dropped 13.4 percent from the previous year.
     The Nikkei stormed up 2.9 percent on Friday to
10,926.65 to log its 11th straight week of gains, its longest
winning streak since 1971, as the softer yen continues to pique
appetite for Japanese exporters. The index is close to a
32-month high hit on Jan. 15.
    The benchmark has rallied about 25 percent since
mid-November, when then-incoming Prime Minister Shinzo Abe began
calling for a weaker currency, aggressive monetary easing and
ambitious fiscal policy to reinvigorate the Japanese economy. 
 
> S&P 500 vaults 1,500 as Wall St extends rally      
> Euro gains as bank fears ease; yen continues slide 
> Yields hit 3-week highs on euro zone recovery signs 
> Gold posts biggest weekly drop in five weeks       
> Profit-taking leaves oil flat after strong week    
    STOCKS TO WATCH
    - MITSUBISHI CHEMICAL HOLDINGS CORP 
    Mitsubishi Chemical is in final talks to seal a long-term
contract to provide coke to Tata Steel Ltd, part of
India's largest conglomerate, the Nikkei business daily said,
after Mitsubishi's contract with Nippon Steel and Sumitomo Metal
Corp ends. 
    -SHIN-ETSU CHEMICAL CO 
    Shin-Etsu Chemical's operating profit for the three quarters
ended December likely grew for the third straight year to more
than 120 billion yen ($1.32 billion) as its U.S. subsidiary
enjoys strong demand, the Nikkei Shimbun said on Saturday. 
    -HITACHI TRANSPORT SYSTEM LTD 
    Hitachi Transport's operating profit for the nine months
ended December probably dropped around 20 percent from the
previous year to just under 15 billion yen ($165 million) due to
poor demand for car parts, the Nikkei newspaper said. 
    -ADVANTEST CORP 
    Advantest's operating profit for the year ending March will
likely undershoot expectations as sales for Apple's iPhone 5
slow, the Nikkei newspaper said, adding that Advantest likely
made an operating loss of around 2 billion yen ($22 million) in
the quarter ending December.
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