Nikkei set to fall on renewed Cyprus concerns, yen rise

Thu Mar 21, 2013 7:36pm EDT

TOKYO, March 22 (Reuters) - Japan's Nikkei share average is
expected to retreat on Friday, pulling back from a 4 1/2-year
high marked on the previous day on renewed worries about Cyprus'
debt problems, while gains in the yen will likely hurt
exporters.
    Market players said declines in the U.S. market also
dampened investor sentiment, with the Nikkei expected to trade
between 12,350 to 12,550 after ending up 1.3 percent to
12,635.69 on Thursday, its highest closing level since early
September 2008.
    The benchmark is up 0.6 percent so far in the week.
    Nikkei futures in Chicago closed at 12,445, 1
percent down from the Osaka close of 12,570.
    "The renewed concerns about a Cyprus bailout is hitting the
mood. Investors worry about the effect on the euro zone. The
Tokyo market has 'overbought signs' anyway, so profit-taking
won't be surprising," said Hiroichi Nishi, an assistant general
manager at SMBC Nikko Securities.
    The Nikkei is currently trading 6.8 percent above its 25-day
moving average. When the index moves more than 5 percent above 
the technical line, it is considered overbought.
    The European Union gave Cyprus till Monday to raise the
billions of euros it needs to secure an international bailout.
Failing that, it could face a collapse of its financial system
that could push it out of the euro currency
zone.. 
    Further denting sentiment, Standard & Poor's cut Cyprus
credit rating deeper into junk status and a survey showed the
euro zone's economic downturn has deepened this month, even
before Cyprus's bailout debacle
    The heightened worries about Cyprus and risk of further
problems for the euro zone have seen investors seek shelter in
the safe-haven yen. That has put pressure on the Nikkei as
investors fret the recent weakening trend in the yen may stall
and undermine the export-driven economy.
    The dollar last traded at 95.08 yen, having fallen
more than 1 percent on Thursday. 
    On Thursday, new Bank of Japan governor Haruhiko Kuroda told
a news conference further bold easing measures were needed to
beat deflation. 
    Analysts said that unless there is a new development, such
as the BOJ calling an emergency meeting to discuss easing
monetary policy before a regular rate review on April 3-4, big
gains in the Nikkei are unlikely before the policy meeting.
    
     
> Wall St slides as Oracle drops, Cyprus worries escalate  
> Yen squeezed higher, euro remains in doldrums          
> Gold hits nearly 1-month high on fears over Cyprus     
> Oil falls on demand outlook worries as Cyprus struggles 
    STOCKS TO WATCH
    
    --Honda Motor Co 
    Honda will recall 76,000 Acura TSX sedans in the United
States to install a water-resistant cover over the electronic
control unit to prevent corrosion that could ultimately lead to
stalling. 
    
    --Renesas Electronics Corp 
    Renesas is in talks with foreign companies about selling the
mobile phone chip business it bought from Nokia Oyj 
three years ago, the company's new president said.
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