Nikkei pulls back from 6-year closing high as yen bounces
* Nikkei still up 50 pct YTD, heading for best yearly rise since 1972 * Credit Suisse further lifts overweight in Japanese stocks By Dominic Lau TOKYO, Dec 4 (Reuters) - Japan's Nikkei stock average pulled back on Wednesday from a six-year closing high set the previous day, with investors pocketing gains as the yen was squeezed higher ahead of the U.S. November jobs report due later this week. The Nikkei, which tends to weaken when the yen strengthens, shed 1.3 percent to 15,552.56 after reaching its highest closing level since December 2007 on Tuesday. Currency-sensitive exporters came under pressure, with Toyota Motor Corp, Honda Motor Co Ltd, Fuji Heavy Industries, Mazda Motor Corp and Apple supplier Nitto Denko Corp down between 0.8 and 2.1 percent. The Japanese currency pulled up from a six-month low against the dollar and a four-year trough versus the euro amid demand for safe-haven assets after a decline in global equities. U.S. stocks fell on Tuesday, with the Standard & Poor's 500 index off 0.3 percent. Investors were concerned the U.S. Federal Reserve will start dialling back its stimulus sooner than thought after recent largely positive economic data. Friday's nonfarm payrolls report was likely to offer further clues as to when the Fed may act. "Tapering could be some time this year ... end of this month. That would actually mean people are a little bit cautious, taking some profits. In general, they are bullish," a Tokyo-based sales trader said, referring to the weak yen. He said some investors took the opportunity to pick up shares of companies with strong outlooks, such as Murata Manufacturing Co Ltd, which was down 0.1 percent, faring better than the Nikkei. This year's stellar performers also took a hit, with mobile operator SoftBank Corp, the most traded on the main board, down 1 percent. It was the second-best performer in the Nikkei year-to-date as of Tuesday close, with a 175 percent increase, more than triple the gain for the benchmark Nikkei. Mazda Motor was the best performer so far this year, with Fuji Heavy Industries coming in the third spot. Driven by Japan's massive fiscal and monetary stimulus, the Nikkei is up nearly 50 percent this year. If the gains were to hold for the rest of the year, it would be the Nikkei's best yearly performance since 1972. Fast Retailing Co Ltd eased 0.9 percent, as the broad market selloff tempered a 7.7 percent rise in same-store sales at its Uniqlo casual clothing chain in Japan in November. The broader Topix index was down 0.9 percent at 1,251.77, with volume at 25 percent of the fully daily average for the past 90 trading days. Credit Suisse further increased its overweight position of Japan in its global equity model portfolio, citing further weakness in the yen as the Bank of Japan was expected to offer further stimulus, the country as a late-cycle play on global recovery, strong earnings revisions, improving macro momentum, and reasonable valuations. "The key to us is that Abe's popularity is still at a level where his mandate for change remains strongly supported. We would not be inclined to 'give up' on the Third Arrow (of Abe's reforms) unless Abe's popularity falls below 50 percent," analysts at Credit Suisse wrote in a report. Among its top picks for 2014 were Dai-ichi Life Insurance , Toshiba Corp, Sony Corp, real estate firm Mitsui Fudosan Co Ltd, tyre maker Bridgestone Corp and retailer Seven & I Holdings.
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