Nikkei rebounds as earnings support sentiment; BOJ outcome eyed

Wed Feb 13, 2013 10:24pm EST

* Asahi Group Holdings soars on share buyback and record
profit
    * Chipmakers in favour after U.S. competitor releases strong
forecast
    * BOJ in spotlight, likely to stand pat on policy

    By Tomo Uetake
    TOKYO, Feb 14 (Reuters) - Japan's Nikkei share average
rebounded on Thursday morning as robust earnings spurred on
chipmakers and a handful of other companies, including brewer
Asahi Group Holdings.
    Still, overall buying activity was relatively restrained,
partly as the market was not expecting any fresh easing measures
from the Bank of Japan at the end of its two-day policy meeting
later on Thursday.
    "There are no broad catalysts to shift the market today,
particularly because there is basically no expectation of any
action from the BOJ," said Takashi Hiroki, chief strategist at
Monex.
    "All we've got is very mixed movements from individual
stocks."
    By the midday break, the Nikkei had moved up 0.6
percent to 11,313.68 after closing down 1 percent on Wednesday
after the yen rebounded sharply after a Group of Seven official
voiced concern about excessive moves in the Japanese currency.
The broader Topix added 0.1 percent to 957.64. 
    Taiyo Yuden Co Ltd was the third-most-weighted
gainer, jumping 16.5 percent to 1,033 yen, its highest level
since July 2001 after the electronic component maker raised its
full-year net profit forecast to 3 billion yen, compared with a
previous forecast to break even.  
    JPMorgan said in a note to clients that the results had left
a positive impression and hiked its own profit estimates for the
next fiscal year and beyond. The brokerage also reiterated its
'overweight' rating for Taiyo Yuden's stock and hiked its target
price to 1,060 yen from 760 yen.
    Investors zeroed in on Asahi, making it the fourth-weighted
gainer with a rise of 7.1 percent after the beverage maker said
it would buy back up to 30 billion yen ($322 million) worth of
its own shares, or 4.3 percent of all its issued stock.
 
    Asahi also posted record sales and net profit for the year
ended Dec. 31 on Wednesday, and said its appetite for overseas
acquisitions is still strong. 
    
    CHIPMAKERS BOOST
    Japanese chipmakers Dainippon Screen Manufacturing Co Ltd
, Advantest Corp and Tokyo Electron Ltd
 posted gains of between 3.7 and 9.5 percent after a
forecast from U.S. counterpart Applied Materials Inc 
came out largely ahead of analysts' estimates as smartphones and
tablets drive sales. 
    However, earnings were a negative catalyst for Oki Electric
Industry Co Ltd, which lost 2.8 percent after the
telecommunication equipment maker cut its operating profit
forecast for the year ending March 31 by 29 percent.
    Investors will also be keeping an eye on the BOJ, which is
widely expected to keep monetary policy steady, but may improve
its assessment of the economy and rebuff growing global concern
that Tokyo is trying to deliberately weaken the yen.
    "Usually the BOJ doing nothing causes a bit of
disappointment, but since there are concerns about the flak
Japan might get at the G20 this weekend for the weakening yen,
standing pat will actually be a relief to the market," said
Masayuki Doshida, senior market analyst at Rakuten Securities.
    The yen has slumped 15 percent against the dollar since
mid-November, accelerating as Japan's new government put
relentless pressure on the BOJ to launch more aggressive policy
easing. The yen's slide has sparked concerns of a currency war
due to the risks of competitive devaluations.
    During that time, the Nikkei has risen 31 percent, hitting a
33-month high of 11,463.75 on Feb. 6, mainly driven by exporters
rising on a weakening yen and on optimism about prime minister
Shinzo Abe's commitment to combat years of deflation and revive
growth.         
    Yoshihiko Tabei, general manager of capital markets research
at Kazaka Securities, said the benchmark faces resistance around
the 11,500 level. 
    "The market needs a catalyst to get investors to buy beyond
that level, such as the appointment of the new BOJ governor or
the U.S. Dow hitting a new high," he said. The Japanese
government is expected to announce the successor to BOJ Governor
Masaaki Shirakawa later this month.
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