Nikkei rises as exporters gain on U.S. data, Italy debt sale

Wed Feb 27, 2013 9:52pm EST

* Nikkei rises 1.9 pct, Topix up 1.6 pct as exporters,
financial lead uptick
    * Nikkei moving towards 12,000 near term- analyst
    * Upbeat U.S. data, well-bid Italian debt sale buoy
sentiment
    * Komatsu surges on report of strong operating profit for
FY13

    By Ayai Tomisawa
    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 gaining momentum.
    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 3.0 percent and Canon
Inc adding 3.4 percent. 
    The Nikkei climbed 1.9 percent to 11,462.63 by the
midday break, breaking above its five-day moving average of
11,432.77, after shedding 3.5 percent in the previous two
sessions. The index is tracking in a range close to a 53-month
high of 11,662.52 marked on Monday.
    "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."
    Analysts said that the short-term correction seems to have
run its course and the Japanese market is heading towards
retesting the 53-month highs next week mainly on hopes for
aggressive easing.
    The government is expected to nominate Asian Development
Bank President Haruhiko Kuroda, an advocate of monetary easing,
as its next central bank chief.
    "Investors overreacted to the rising yen after the Italian
election uncertainty startled the market," said Hikaru Sato, a
senior technical analyst at Daiwa Securities. "The Nikkei may
not put on sharp gains in the near term unless the yen sharply
drops, but it certainly is on track to move higher towards
12,000."
    The benchmark Nikkei has rallied nearly 32 percent since
mid-November as the yen weakened after Prime Minister Shinzo Abe
embarked on bold reflationary policies aimed at reviving the
economy.
    Sentiment on the day got a boost from U.S. Federal Reserve
Chairman Ben Bernanke restating 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. 
    Financials also enjoyed a bounce, with Nomura Holdings
, Japan's top brokerage, up 2.3 percent and Sumitomo
Mitsui Financial Group putting on 2.7 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 1.6 percent to 969.12
with 1.58 billion shares changing hands by the midday break,
which is on track to post moderate daily volume. Last week's
average daily volume was 2.93 billion shares.
    Komatsu Ltd surged 4.8 percent 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.