Nikkei may test 14,000 as weak yen seen bolstering company earnings

Wed Apr 24, 2013 7:12pm EDT

TOKYO, April 25 (Reuters) - Japan's Nikkei share average is
expected to open higher and may test the 14,000-mark on
Thursday, a level not seen since June 2008, driven by
expectations that the yen weakness will spur strong earnings
growth for long suffering Japanese firms.  
    "The impact of 'Abenomics' as well as the Bank of Japan's
monetary easing continues, and the outlook is for the yen to
weaken further," said Hiroichi Nishi, an assistant general
manager at SMBC Nikko Securities. Abenomics refers to prime
minister Shinzo Abe's bold fiscal and monetary expansionary
policies aimed at ending two decades of stagnation.
    "The weaker yen is having a positive effect on companies'
earnings, which in turns is lifting stocks," he said. "For now,
we see this trend continuing."
    Camera-and-printer maker Canon Inc, for example,
raised its full-year operating profit forecast by nearly 10
percent to 450 billion yen ($4.5 billion) on Wednesday as a
weaker yen bolstered the company's outlook. 
    The Nikkei is likely to trade between 13,750 and
14,000, strategists said, while Nikkei futures in Chicago closed at 13,915 on Wednesday, up 0.6 percent from the
Osaka close of 13,830.
    On Wednesday, the Nikkei jumped 2.3 percent to 13,843.46,
its highest level in nearly five years, and the broader Topix
 index climbed 1.8 percent to 1,164.35.    
    The benchmark Nikkei has rallied nearly 60 percent since
mid-November, when Abe, who became prime minister in December,
promised expansionary monetary and fiscal policies to revive the
world's third-largest economy. During the same period, the yen
has weakened 24 percent against the dollar.
                     
> Wall St ends mostly flat, Procter, AT&T tumble           
 > Euro climbs vs U.S. dollar though caution ahead of ECB 
 > Treasuries edge up after weak data, good auction        
  > Gold rises on physical buying, outlook cautious        
 > Brent jumps nearly 2 pct; U.S. gasoline stocks decline  
 

    STOCKS TO WATCH
    --CANON INC 
    Canon raised its full-year operating profit forecast by $300
million as a weakening yen triggered by Japan's latest
deflation-fighting policies inflates its overseas earnings,
despite smartphones sapping compact camera sales.
 
    --NINTENDO CO LTD 
    Nintendo, which generates three quarters of its revenue
abroad, on Wednesday forecast a profit of 100 billion yen for
the fiscal year ending March 2014 after two years of losses as
the Wii game console boom ebbed.
    It said it expects to sell 9 million of its new Wii U game
consoles this business year after a disappointing start since
their launch in November. 
    --SHISEIDO CO LTD 
    Shiseido said on Wednesday it would write down its $1.9
billion acquisition of U.S. cosmetics firm Bare Escentuals due
to disappointing sales, pushing the Japanese cosmetics company
to its first net loss in eight years. 
    --MITSUBISHI MOTORS CORP 
    Mitsubishi Motors said the overheating of lithium-ion
batteries used in its Outlander SUV plug-in hybrid was likely to
have been caused by cells that were damaged when dropped onto
the ground during manufacturing.
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