Nikkei set to rise as yen pulls back, Fed stimulus concerns ease

Sun Jun 9, 2013 7:41pm EDT

TOKYO, June 10 (Reuters) - Japan's Nikkei share average is
expected to rebound sharply on Monday, as short-covering on
exporters on the back of a weaker yen is likely to further move
the index away from bear territory it reached last week.
     The U.S. dollar rose on Friday on resilient U.S. jobs data,
while Wall Street rallied as investors came round to the view
that the Federal Reserve would need to see firm evidence of
economic strength before scaling back its massive bond-buying
program.    
     Market players said the Nikkei was likely to trade between
13,050 to 13,350 on Monday after falling 0.2 percent to
12,877.53 on Friday. It dropped as low as 12,548.20 during
intraday trade on Friday, which marked a 21 percent slide from a
5-1/2 year peak hit on May 23, leaving the index in bear market
territory.
    Nikkei futures in Chicago closed at 13,220, up 4.3
percent from the close in Osaka of 12,680.
   Japanese equities tumbled over the past two weeks, with
trading characterised by volatile price moves, as investors were
spooked by worries over slowing growth in China, and uncertainty
over whether the Fed would roll back its stimulus this year.
    Analysts said that exporters and financials may attract
buyers as they were looking cheap after the heavy selling
recently.
    "After the index rises to around 13,300, buying may slow
down, but sentiment should stay positive throughout the day,"
said Yutaka Miura, a senior technical analyst at Mizuho
Securities.
    He said that market sentiment will get a boost after the
dollar recovered from a two-month low it hit against the yen on
Friday. It was last trading at 98.30 yen.
    On Friday, the U.S. Labor Department's data showed job gains
of 175,000 in May, slightly above the economists' forecast. But
the unemployment rate increased to 7.6 percent from 7.5 percent
in April, easing concerns that the Fed may be reducing its
stimulus in the near future, boosting U.S. stocks.
    Miura also said the mood has improved since the Government
Pension Investment Fund (GPIF) said after Friday's closing bell
that it would lift its weighting in foreign and domestic stocks.

> Wall St rallies after U.S. jobs data, ends up for week    
> Dollar rebounds as U.S. jobs data shows economic resilience
 
> U.S. bonds drop on renewed bets of less Fed buying       
> Gold falls 2 pct as U.S. jobs data dims stimulus hope   
> Oil gains $1 as U.S. equities rally on jobs data         
    STOCKS TO WATCH
    
    --SoftBank Corp 
    Softbank is in talks with Deutsche Telekom AG DTEGn.DE over
a possible deal for T-Mobile US Inc TMUS.N, as the Japanese
company looks for alternatives to enter the U.S. wireless market
if its $20.1 billion deal with Sprint Nextel Corp S.N falls
apart, according to three sources familiar with the situation on
Friday. 
    
    --Toshiba Corp 
    Westinghouse Electric Co., Toshiba's U.S. nuclear power
unit, will likely win a 10 billion dollar contract to build two
nuclear reactors in the Czech Republic, the Nikkei reported.
        
    --Marubeni Corp 
    Marubeni is in advanced talks to leave the energy business
of Gavilon out of its planned takeover of the U.S. agriculture
merchant, two sources with direct knowledge of the deal said on
Friday.
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