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