Nikkei set to tap fresh 5-year highs as dollar breaks above 100 yen

Thu May 9, 2013 7:37pm EDT

TOKYO, May 10 (Reuters) - The Nikkei share average is
expected to scale yet another five-year high on Friday as the
U.S. dollar finally managed to break above the elusive 100 yen
mark, putting the Japanese currency at levels that should
generate robust earnings for many exporters.
     Market players said the Nikkei was likely to trade between
14,350 to 14,550 on Friday after dropping 0.7 percent to close
at 14,191.48 on Thursday.
    If the index trades above its resistance line of 14,500, a
level that some analysts expect will be reached by next month,
it would mark the first such move since early June 2008.
    Nikkei futures in Chicago closed at 14,545, up 2.2
percent from the close in Osaka of 14,230.
    The U.S. dollar broke through 100 yen on Thursday, its
highest level against the currency in over four years, helped by
 data showing U.S. claims for unemployment benefits fell to the
lowest level since January 2008.
    The dollar last traded at 100.70 yen.
    "Many investors have waited for this moment when the yen
drops to 100 against the dollar. It raises hopes that exporters
will revise up their earnings for the business year," said
Yutaka Miura, senior technical analyst at Mizuho Securities.
     With the earnings season in full swing and companies
reporting strong results for the year ended March 2013, many of
the blue chip companies have surprised investors with overly
conservative forecasts for the current fiscal year. The likes of
Toyota Motor Corp and Sony Corp based their
foreign exchange assumptions at 90 yen to the dollar.
     However, traders were optimistic about the outlook for
corporate Japan.
    "Conservative forecasts did not lead to pessimism in the
market. They rather made us think, 'oh, they can generate such
profits even at 90 yen, then their actual profits will be way
better at the end of the day,'" said Takuya Takahashi, an
analyst at Daiwa Securities.
    Mizuho Securities' Miura believes some investors may book
profits before the closing bell as they tend to shed large
positions before the weekend.
    "Also, strong buying in the Japanese market was partly
supported by Wall Street's strength over the past few days. U.S.
stocks fell overnight, so some investors may want to unwind
their positions," Miura added.

> S&P 500 slips, snaps five-day streak of record closes    
> US dollar vaults 100 yen mark to 4-year high           
> Prices dip as investors eye U.S. jobs data              
> Gold down 1 pct on broad dollar rally; PGMs higher     
> Brent oil closes higher after late gains                
    STOCKS TO WATCH
    
    --Sony Corp 
    Sony said it expects operating profit to hold steady in the
year to March 2014 after profits rose to its highest in five
years last year, with overseas sales bolstered by a weakening
yen.  
    
    --Suzuki Motor Corp 
    Suzuki, Japan's No.4 automaker, booked a record 80.4 billion
yen ($813.60 million) in net profit for the year ended March, up
49.2 percent year-on-year, helped by record vehicle sales.