Nikkei seen strong on further signs of U.S. recovery, weak yen

Sun Feb 3, 2013 6:50pm EST

TOKYO, Feb 4 (Reuters) - Japan's Nikkei share average was
expected to climb on Monday after robust data pointed to a U.S.
economic recovery on track, lifting U.S. stocks to five-year
highs and helping the dollar extend gains against the yen.
    Market players said the Nikkei was likely to trade between
11,200 to 11,400 on Monday after Nikkei futures in Chicago closed at 11,280, up 1 percent from the close in Osaka
 of 11,170.
    U.S. data showed job creation is increasing steadily and the
pace of growth in manufacturing hit a nine-month high in
January.
    The yen, already on rapid downtrend due to aggressive stance
on fiscal and montetary policy easing from new Japan Prime
Minister Shinzo Abe, slumped to a fresh 33-month low of 92.83
versus the greenback by Monday morning before the stock market
open.
    "Signs of strength in the U.S. economy encourages risk
taking and weakened the yen, both of which will make investors
eager to buy up stocks of firms that benefit from a softer
exchange rate," said Masayuki Doshida, senior market analyst at
Rakuten Securities.
    Optimism that a weaker yen will swell exporters' revenues
has driven the Nikkei up 29 percent since mid-November, when
Abe, then candidate for opposition leader began calling for a
softer currency, as well as aggressive monetary policy to drag
Japan out of deflation.
    Japan's earning season is now in full swing, though the last
quarter's results have shown little evidence of the exchange
rate's benefits. 
    Sixty-six percent of the 47 percent of companies that have
reported so far have beaten analysts' estimates, according to
Thomson Reuters Starmine. 
    "There have been two very different reactions to bad
results: one, the stock is simply sold off, or two, it is bought
up because there's positive signs of what's to come," Doshida
said.
    "So Nintendo was sold off after it cut its forecast even
though the yen is weak, but Komatsu was bought up despite
cutting its forecast because there's signs of a pick-up in
China, where it has high exposure," he added.
    Japan Airlines Co Ltd and Hitachi Ltd 
among those to report after close on Monday.
    The Nikkei closed up 0.5 percent to 11,191.34 on Friday,
with its weekly advance of 2.4 percent giving it 12 straight
weeks of gains, its longest weekly winning streak since 1959.  
     
> Wall St surges to 5-year highs; Dow ends above 14,000    
> Euro broadly stronger, U.S. dollar up after jobs data  
> Bonds slip as stock gains hurt bid for safe-haven debt  
> Gold lifted by US payrolls data, posts weekly gain     
> Brent crude jumps, premium over US crude widens         
    STOCKS TO WATCH
    - SHARP CORP 
    Sharp eked out a quarterly operating profit on Friday,
improving the bailed-out consumer electronics maker's chances of
convincing lenders and shareholders that it remains a viable
company. 
    -PANASONIC CORP 
    Panasonic posted a quarterly operating profit of 34.6
billion yen ($379 million) for the October-December period, up
from an 8.1 billion yen loss a year ago, and maintained its
forecast for a full-year operating profit. It maintained its
record net loss forecast on write-downs of goodwill and assets.
    -TOBU RAILWAY CO LTD 
    Tobu Railway is likely to have doubled its operating profit
to around 37 billion yen ($400 million) in the nine months ended
December, the Nikkei business daily said, largely due to the
success of Tokyo Skytree, a popular tourist attraction.
    -SUMITOMO CHEMICAL CO LTD 
    Sumitomo Chemical said it expects to see a 50 billion yen
net loss in the financial year ending March 31, partly due to an
extraordinary loss from shutting down an ethlyene plant in
Chiba, Japan. The company also said it would pay a full-year
dividend of 6 yen for the whole year but not in the fourth 
quarter.
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A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

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