Nikkei hits five-year high on Wall St.,German data; Sharp surges

Tue May 7, 2013 11:32pm EDT

* Softbank rises after strong Alibaba quarterly results
    * Sharp up on report of screen production for next iPhone
    * Toshiba sags on report of undershooting earnings guidance

    By Ayai Tomisawa
    TOKYO, May 8 (Reuters) - Japanese shares hit a five-year
high on Wednesday, buoyed by a record finish on Wall Street and
data showing unexpectedly strong industrial orders for Germany,
easing concerns over the euro zone's powerhouse.
    Sharp Corp surged 7.5 percent after a newspaper
reported that the struggling consumer electronics maker would
begin mass production of liquid crystal displays for the next
model of Apple Inc's iPhone 5 in June.
    The Nikkei share average climbed 1.4 percent to
14,371.65 by the midday break after hitting as high as
14,376.30, its highest since June 2008, extending the previous
session's 3.6 percent rally that came after an extended holiday
and last week's strong U.S. jobs data.
    Investor sentiment was helped by a jump in German industrial
orders, which confounded expectations for a drop while U.S.
stocks continued their strong run, with the S&P 500 
hitting another record high.
    "The steady inflows from foreign investors are ongoing. It
wasn't apparent yesterday just because people are still off for
holiday. But today we are seeing more buying demand than 
yesterday. It is providing good support for the market," a
trader at a foreign brokerage said.
    The broader Topix index gained 1.1 percent to
1,201.93.
    
    EARNINGS IN FOCUS
    Japanese corporate earnings as well as forecasts for the
current year through March are also in focus.
    "So far, the overall impression is that results seem to be
good but forecasts are conservative," said Hiromichi Tamura,
chief strategist at Nomura Securities. "But the momentum has
been strong and investors expect further rises in the Japanese
market."
    Tamura, who predicts the Nikkei to touch 14,500 by June and
16,000 at the end of the year, said that the index's recent
surge has not stopped investors from buying more stocks.
    "Japanese stocks are cheap given companies' potential growth
in their earnings mid-term even though forecasts are
conservative at this point," he said.
    In April, foreign investors snapped up Japanese stocks, with
net buying at 2.68 trillion yen, the highest monthly level since
July 1982 when the Tokyo Stock Exchange started keeping records.
   
    The benchmark Nikkei has surged more than 65 percent since
mid-November, when Prime Minister Shinzo Abe began promising
expansionary monetary and fiscal policies to revive the economy
during his election campaign.
    Stocks got a further shot in the arm on April 4 when the
Bank of Japan stunned markets by launching a massive monetary
expansion campaign aimed at lifting the economy from its long
slumber. 
    On Wednesday, index heavyweight SoftBank Corp 
climbed 3.7 percent after Chinese e-commerce company Alibaba
Group, in which the Japanese firm holds a stake, reported a
roughly 80 percent year-on-year increase in revenue to $1.84
billion in the last three months of 2012.
    Mitsubishi Estate Co, however, fell 3.5 percent to
3,080 yen after the realtor said it sees lower-than-expected
operating profit for the year ending March 2014.
    Toshiba Corp sagged 4.3 percent after the Nikkei
said Japan's leading chipmaker and supplier to Apple was likely
to miss its own operating profit forecast by 23 percent for the
business year that ended in March.
    Toshiba, which is to announce its fourth quarter results
after the market close, was the most traded stock on the main
board by turnover.
    Of the 67 Nikkei companies that have posted quarterly
results so far, 55 percent of them either beat or met market
expectations, according to Thomson Reuters StarMine. That
compared with 62 percent misses in the previous quarter.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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