Tokyo shares lack direction, Fanuc weighs on Nikkei

Mon Feb 18, 2013 10:44pm EST

* Bridgestone pulls up tyre companies on strong earnings
    * Machine tool orders for China weigh on index
    * Social gaming companies in the spotlight

    By Tomo Uetake
    TOKYO, Feb 19 (Reuters) - Japan's Nikkei share average edged
down in morning trade on Tuesday as heavyweight Fanuc Corp
 weighed after weak machine tool orders data from China
was issued, while investors were reluctant to move ahead of
major events on the horizon.
     Investors await Abe's nomination of the new Bank of Japan
governor, which will be announced after he returns from a trip
to Washington, according to economics minister Akira Amari.
 
    "Before Prime Minister Shinzo Abe's U.S. visit and Italy's
election this weekend, many investors have adopted a
wait-and-see attitude," said Hiroichi Nishi, an assistant
general manager at SMBC Nikko Securities.
    The Nikkei edged down 0.1 percent to 11,395.16 by the midday
break, after jumping 2.1 percent on Monday to near a 4-year high
struck on Feb. 6, when BOJ governor Masaaki Shirakawa said he
would leave his post three weeks early.
     Market players say the appointment of the new governor will
determine the direction of the stock market and the yen, since
they expect Abe to choose a governor eager to implement more
aggressive measures to end years of deflation and lift the
world's third-biggest economy out of recession.
    Index heavyweight and industrial robotics maker Fanuc 
weighed on the benchmark after the Japan Machine Tool Builders'
Association said machine tool orders to China had dropped 65
percent in January compared to the previous year.
    Fanuc lost 3.4 percent, taking 21 points off the benchmark.
    The broader Topix edged up 0.3 percent to 965.61 as
a softer yen continued to support exporters and stellar profits
for tyre maker Bridgestone Corp helped the rubber
products sub-index jump 7.1 percent as the
best-performing sector.
    Bridgestone soared 9.2 percent to hit its highest in more
than five years after the tyre maker announced a 50 percent
increase in its operating profit for the year ended Dec. 31, and
overshot analysts' estimates with its current year profit
forecast.
    The stock was the second-most-traded on the main board.

    WHERE NOW FOR THE YEN?   
    Concerns about the euro zone's economic outlook were
exacerbated after European Central Bank president Mario Draghi
said on Monday the euro's appreciation added downside risks to
price stability.
    Japanese exporters have benefited from the yen's 20 percent
fall against the common currency since November, when Shinzo
Abe, then a candidate for the opposition leader and now prime
minister, began calling for a weaker yen.
    The yen dipped a little further against the dollar at the
weekend after Abe's economic policies escaped direct criticism
at a meeting of G20 policymakers in Moscow at the weekend, which
investors took as a green light for Japan to continue with its
aggressive monetary easing. 
    However, some analysts questioned whether the currency will
continue to slide at the same speed as it has over the last
2-1/2 months.
    "The yen has paused today, and its direction from here on
has become a little less unclear, particularly if the U.S.
begins to complain about the falling competitiveness of its auto
industry," said Fumiyuki Nakanishi, general manager of
investment and research at SMBC Friend Securities.
    "But it's unlikely to return to 80 yen against the dollar
and even if it firms I expect exporters will be supported by
dip-buying." 
    With automakers taking a breather after seeing robust gains
on Monday, social gaming network providers Gree Inc and
DeNA Co Ltd were in the spotlight. Gree jumped 5.3
percent after the social gaming network provider said it would
buy back 1 percent of its shares, spending up to 3 billion yen,
($32 million) while DeNA was the third-most-traded share on the
main board, losing 2.2 percent.
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