Nikkei pares gains as BOJ stands pat, set to fall for 4th straight month

Wed Apr 30, 2014 1:25am EDT

* Nikkei up slightly as BOJ refrains from easing
    * Many investors still expect BOJ to ease policy later
    * Kyocera, Mitsubishi Elec lead gains after upbeat guidance

    By Hideyuki Sano
    TOKYO, April 30 (Reuters) - Japanese shares pared much of
their earlier gains in choppy trade on Wednesday after the Bank
of Japan affirmed its existing policies - disappointing some
speculators who had bet on the outside chance of a surprise
easing.
    The market focus is now shifting to the BOJ's economic
outlook report and Governor Haruhiko Kuroda's briefing, both
planned after market close, followed by the U.S. Federal
Reserve's policy statement later in the day.
    The Nikkei stood almost flat at 14,303.61, having
give up most of the 0.9 percent gain it made earlier on the back
of some positive earnings guidance.
    "I think that there were people who were hoping for an
easing. For now, investors will be focusing on what Kuroda will
say," said Takuya Takahashi, senior strategist at Daiwa
Securities.
    "But if you think Kuroda will keep to his assessment that
the economy is on track to hit the BOJ's inflation target, then
basically there will be few market-supportive comments," he
added.
    The Nikkei looks set to post its fourth straight month of
losses in April, having fallen 3.5 percent so far, which would
be longest such streak since 2008.
    The Nikkei has dropped more than 12 percent since the start
of 2014, making it the worst performer among major markets.
   That partly reflects profit-taking after an outsized gain of
57 percent last year, but the weakness stems also from receding
expectations of additional BOJ easing.
    Some speculators had bet that Kuroda could unveil stimulus
as early as this month to counter the effect of sales tax hike
that kicked in on April 1, with many investors still thinking
easing is likely around July.
    But Kuroda's bullish comments on the Japanese economy has
some investors questioning whether there will be an easing at
all.
    On top of monetary policy outlook in Japan and the United
States, investors are looking to corporate earnings, as many
Japanese firms will be announcing their guidance for the year to
March until mid-May.
    Kyocera Corp gained 3.9 percent after the ceramics
manufacturer announced an upbeat outlook for the year to March
2015, citing firm demand for its smartphone and tablet parts. 
    Mitsubishi Electric rose 3.1 percent after giving
optimistic guidance, in which it said it expected record revenue
and net profit in 2014/15.
    Carmakers led the gains after the yen hit three-week low
versus the dollar, with Toyota Motor Co rising 1.1
percent and Honda motor 2.1 percent.
    "I think the market will be supported around current levels.
Even when some companies miss market expectations, their share
prices do not necessarily fall because the valuation has become
reasonable," said Toshiyuki Kanayama, market analyst at Monex
Securities.    

 (Editing by Eric Meijer)