Nikkei bounces back on short-covering; BOJ outcome awaited
* Nikkei rises 0.7 pct, Topix up 0.3 pct * BOJ widely expected to keep policy unchanged * Nikkei may hover around 14,000 in short term - analyst By Tomo Uetake TOKYO, Aug 8 (Reuters) - The Nikkei average rebounded on Thursday morning on short-covering after falling sharply versus the previous day, but the gains were seen as vulnerable given uncertainty over the U.S. Federal Reserve's timing of a stimulus pull-back. Investors are also looking for leads from the Bank of Japan's two-day policy board meeting ending later in the day. The benchmark Nikkei gained 0.7 percent to 13,916.94 in choppy midmorning trade, after going as low as 13,777.11 and as high as 14,025.92 earlier. It tumbled 4 percent to 13,824.94 on Wednesday. "Domestic investors are adjusting positions in response to company earnings announcements and buying stocks that are deemed undervalued," said Shun Maruyama, chief Japan equity strategist at BNP Paribas in Tokyo. "But I don't think institutional investors and hedge funds are very active today. The market is completely swayed by currency moves." The Japanese currency was last traded at 96.66 yen against the dollar, moving away but still not far from a seven-week high of 96.32 yen touched on Wednesday. Maruyama said he expects the benchmark Nikkei to hover around 14,000 for a while as there will be no major catalyst in the market. "Once the Nikkei tops the 14,000 mark, it should bring investors some sense of relief." The broader Topix rose 0.3 percent to 1,158.45, with index heavyweights Fast Retailing Co Ltd, SoftBank Corp and Fanuc Corp were up between 1.3 and 1.6 percent each. Other notable gainers include Kubota Corp, which jumped 5.7 percent after the tractor maker reported a 92 percent rise in net profit for the April-June quarter, due to strong sales overseas. The Bank of Japan is widely expected to maintain its stimulus later on Thursday as the board debates whether positive signals from prices and job market data justify offering a rosier view of the economy. The Japanese government's fiscal expansionary policy, coupled with the BOJ's aggressive monetary stimulus, have helped push the benchmark Nikkei up 34 percent this year.
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