Nikkei bounces 2 pct on U.S. data, Italy debt sale; exporters rally

Wed Feb 27, 2013 8:09pm EST

* Nikkei rises 2 pct, Topix up 1.8 pct as exporters,
financial lead uptick
    * Upbeat U.S. data, well-bid Italian debt sale buoy
sentiment
    * Komatsu surges on report of strong operating profit for
FY13

    By Dominic Lau
    TOKYO, Feb 28 (Reuters) - Japan's Nikkei average rebounded
from a two-day losing run on Thursday after a well-bid Italian
debt auction eased concerns that an inconclusive election could
reignite the euro zone debt crisis and U.S. data showed the
economy was improving.
    Stocks that were sold off heavily in the previous two
sessions led the bounce, with Toyota Motor Corp up 2
percent, Honda Motor Co gaining 2.9 percent and Canon
Inc adding 3.3 percent. 
    The Nikkei climbed 2 percent to 11,474.83, breaking
above its five-day moving average of 11,436.32, after shedding
3.5 percent in the previous two sessions.
    "It's certainly a great chance to buy" after the past two
days, said Stefan Worrall, director of equity sales at Credit
Suisse in Tokyo.
    "What we had coming into this week was some suggestion that
the market was stretched. The market was due for a correction.
It was well telegraphed and well discussed. There had been other
factors too contributing to the uncertainty, such as the Italian
election."
    But sentiment was buoyed after U.S. Federal Reserve Chairman
Ben Bernanke restated the Fed's commitment to monetary stimulus,
while Wednesday's better U.S. economic data also underpinned
risk appetite.
    A gauge of planned U.S. business spending recorded its
largest increase in more than a year in January and contracts to
buy previously owned U.S. homes approached a near three-year
high last month. Investors were also relieved after a well-bid
Italian debt auction.
     Italy's borrowing costs rose to their highest in four
months on Wednesday at the first bond auction since this week's
inconclusive election but solid demand from domestic investors
eased fears that the political deadlock could destabilize
Europe's second-biggest sovereign debt market. 
    The benchmark Nikkei ended at a 53-month high on Monday,
rallying nearly 35 percent since mid-November as the yen
weakened after Prime Minister Shinzo Abe embarked on bold
reflationary policies aimed at reviving the economy.
    Financials also enjoyed a bounce, with Nomura Holdings
, Japan's top brokerage, up 2.9 percent and Sumitomo
Mitsui Financial Group putting on 2.8 percent.
    Japanese banks' earnings outlook improved sharply in
February. Their one-month earnings momentum -- analysts'
earnings upgrades minus downgrades as a total of estimates --
rose to 30.2 percent from 3.1 percent in January, according to
Thomson Reuters I/B/E/S. That compared with an average of 8
percent for Japanese companies in February. 
    The broader Topix index gained 1.8 percent to
970.63.
    Komatsu Ltd surged 5.1 percent and was the most
traded on the main board by turnover after the Nikkei newspaper
said the construction machinery maker was expected to forecast a
30 percent jump in operating profit for the fiscal year ending
March 2014 from its estimate of 230 billion yen for this
business year. 
    Its rival Hitachi Construction Machinery Co Ltd 
advanced 2.6 percent.