Nikkei set to gain on late Wall St rally, BOJ easing expectations

Mon Mar 4, 2013 6:10pm EST

TOKYO, March 5 (Reuters) - Japan's Nikkei average is
expected to open higher on Tuesday after U.S. stocks staged a
late rally, while the confirmation hearing of Bank of Japan
nominees should continue to boost expectations of further easing
by the central bank.
    The Nikkei is likely to trade between 11,650 and
11,850, strategists said, while Nikkei futures in Chicago closed at 11,750 on Monday, up 0.9 percent from the
Osaka close of 11,650.
    "Yesterday the Nikkei rose above 11,750 at one point but the
Chinese market decline was a negative factor," said Takashi
Hiroki, chief strategist at Monex Inc. "However, the Dow Jones
industrial average went up to almost an all-time high
last night. That was positive news."
    Hiroki said Tuesday's confirmation hearing of Kikuo Iwata,
the nominee for one of the deputy BOJ governors, would also
support the market as the academic advocates unconventional
monetary policy.
    "He is known as a strong deflation fighter. We expect
aggressive comments from Mr Iwata. His speech is likely to
support the market," he said.  
    The Nikkei rose 0.4 percent to 11,652.29 on Monday after
climbing to a 53-month high of 11,767.68 intraday as Haruhiko
Kuroda, the nominee for BOJ governor, outlined a forceful policy
to defeat deflation. The broader Topix index gained 0.8
percent to 992.25.
    The benchmark Nikkei has rallied almost 35 percent since
mid-November, spurred by the weaker yen after Prime Minister
Shinzo Abe embarked on bold reflationary policies to pull
reignite the economy.
    Still, some analysts said many foreign investors remained
sceptical about Japan's attempt to revive its economy but were
afraid of missing out on the rally, prompting them to buy Nikkei
index call options instead of picking up stocks. 
    On Monday, the most traded Nikkei March index options was a
call with a strike price of 12,000, 3 percent above the current
level, Societe Generale said in a note. The next most traded was
another call at 12,250, followed by a call at 12,500 and a put
at 11,000. 
                     
> Wall St closes higher in late-day rally                   
> Euro sluggish on Italy uncertainty, ECB rate outlook    
> Treasuries ease as investors book profits                
> Gold eases as ETF holdings fall again, U.S. cuts eyed   
> Oil falls on slowing Chinese economy, ample U.S. supply  

    STOCKS TO WATCH
    --TOYOTA MOTOR CORP 
    Toyota will turn a profit in its European automotive
business during the current fiscal year for the first time since
2007, a feat the company expects to repeat in fiscal 2013 as new
models help seize market share from rivals. 
    --HISAMITSU PHARMACEUTICAL CO INC 
     A panel of advisors to the U.S. Food and Drug
Administration recommended that the agency reject a drug for hot
flashes associated with menopause made by Hisamitsu's subsidiary
Noven Pharmaceuticals Inc. Ÿ
    --SONY CORP, DENA CO LTD 
    Sony said it would sell all the shares it owns in Japanese
online game provide DeNA to Nomura Securities, a unit of Nomura
Holdings. 
    --HONDA MOTOR CO 
    Honda and its joint venture partners sold 32,024 cars in
China in February, down 27.1 percent from a year earlier, the
Japanese automaker said on Monday. 
    --NISSAN MOTOR CO 
    Nissan and its China joint venture sold about 58,200 cars in
China in February, down 46 percent from a year earlier, the
Japanese automaker said on Monday. 
    --FAST RETAILING CO 
    Fast Retailing said on Monday that same-store sales at its
Uniqlo basic clothing outlets in Japan jumped 9.6 percent in
February from a year ago.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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