Nikkei up on strong global markets; Toyota, brokerages lead gains

Wed May 8, 2013 11:17pm EDT

* Securities shares outperform on upbeat market
    * Toyota strong, Nomura hikes target by 30 pct
    * Japan outperforms peers but still has upside -analyst
    * Toshiba sags on poor earnings

    By Ayai Tomisawa
    TOKYO, May 9 (Reuters) - Japan's Nikkei share average rose
for a third session on Thursday, buoyed by a record finish on
Wall Street and strong European shares, and led by gains in
Toyota Motor Corp shares after the automaker reported
full-year results.
    By the midday break, the Nikkei was up 0.7 percent to
14,381.99, nearing Wednesday's intraday peak of 14,421.38, its
highest level since June 2008.
    The securities subsector, which gained 3.1
percent, was the best performer on hopes of an increase in
commission fees on the back of an upbeat market. Nomura Holdings
 rose 5.1 percent while Daiwa Securities was up
1.5 percent. 
    The Nikkei is trading 7 percent above its 25-day moving
average of 13,436.46, which indicates that shares are
overbought.
    "Japanese stocks have already been high and some investors
have expressed concern of a short-term pull-back, but there's
been renewed investor appetite after both U.S. and European
stocks hit record highs," said Kenichi Hirano, a strategist at
Tachibana Securities.
    The S&P 500 closed at an all-time high for a fifth session
on Wednesday, while German shares hit all-time highs and the
FTSEurofirst 300 index of leading regional shares rose
to a five-year high.
    After a brief pause, the Japanese market has resumed its
record run in recent sessions, underpinned by central bank and
government policies to revive growth and as the United States,
Germany and China snap a run of soft data with upbeat economic
reports.
    The Topix was up 0.3 percent to 1,198.33 on
Thursday.
    The Nikkei has gained 38 percent this year on Prime Minister
Shinzo Abe's expansionary policy and the central bank's bold
monetary policy.
    Over the same period, both the benchmark S&P 500 and
the Dow Jones industrial average have added 15 percent
and the FTSEurofirst 300 index has advanced 8.4
percent.
    "Japan outperforms its global peers. But it has more upside
because speaking from a standpoint of an expected improving
economy, Japan seems most promising (for investors)," said
Hikaru Sato, senior technical analyst at Daiwa Securities. 
    "More growth measures are expected in the second half of
this year by the Japanese government, while in the U.S., people
are still carefully monitoring its economic data... European
markets started to pick up but worries about persistent debt
problems linger."
    
    TOYOTA IN FOCUS
    Toyota, whose American Depositary Receipts (ADRs) rose more
than 3 percent, gained 1.4 percent in Thursday trade and was the
third-most traded stock by turnover despite its conservative
profit forecast for the year through March 2014.
    "The company based its dollar-yen assumption at 90 yen,
which is very, very conservative. If the company had based it at
95 yen, the forecast would have been impressive," said
Tachibana's Hirano.
    Toyota expects operating profit of 1.8 trillion yen ($18.17
billion) in the current fiscal year, which would be below its
peak of 2.3 trillion yen in the year ended March 2008.
    Nomura Securities, which hiked Toyota's target by nearly 30
percent to 7,500 yen from 5,800 yen while keeping a 'buy'
rating, forecast a 68 percent annual rise in operating profit to
2.21 trillion yen for the current fiscal year. 
    The brokerage assumed the dollar would trade at an average
97 yen and the euro at 126 yen. Each 1 yen weakening against the
US dollar and euro boosts operating profits by 45.0 billion yen
and 4.0 billion yen, respectively, Nomura said.
    Other exporters also rose, with Nissan Motor Co 
rising 2.7 percent and Sony Corp gaining 0.8 percent.
    But Toshiba Corp dropped 3.5 percent after it
posted a worse-than-expected operating profit for the year ended
March 31 due to weak TV sales.
    The dollar last traded at 98.83 yen, while the
euro was at 130.07 yen.