Nikkei rises in choppy trade; Toshiba gains on growth prospects

Thu May 8, 2014 10:02pm EDT

* Toshiba gains on upward revision hopes
    * Toyota's weak forecast priced in - traders
    * Rakuten tumbles on poor quarterly results

    By Ayai Tomisawa
    TOKYO, May 9 (Reuters) - Japanese stocks edged higher on
Friday in choppy trade as investors picked up companies with
strong growth prospects, such as Toshiba, while concerns about
the Ukraine crisis kept investors on edge.
    Toyota Motor Corp initially fell as much as 2
percent before rising 0.8 percent by midmorning. The automaker
forecast a profit decline this fiscal year but traders said the
news had been priced into the shares. 
    The Nikkei stock average was up 0.4 percent at
14,216.15 as of 0148 GMT after opening lower. The benchmark was
trading below its 25-day moving average of 14,419.29. It has
shed 1.7 percent so far this week.
    Market analysts said investors were staying cautious because
many companies have reported conservative guidance during the
current earnings season.
    "It's a bit tricky because on top of companies' conservative
forecasts, investors are concerned about the impact of the tax
hike," said Kenji Shiomura, an analyst at Daiwa Securities,
referring to an increase in the national sales tax last month.
    He said the market may see directionless trade until
investors have digested the results and forecasts from major
companies.
    Toshiba Corp rose 1.8 percent after forecasting
record operating profit this business year, helped by strong
sales of power grid equipment and robust income from flash
memory chips. 
    Although Toshiba's forecast lagged market expectations,
there are hopes that the company will revise up its guidance,
traders said.
    "We expect upward profit revisions in memory, medical, and
energy and increased confidence in avoiding further project
impairment to act as catalysts for the stock," a trader at a
foreign brokerage said.
    On the other hand, Rakuten Inc tumbled 7.1 percent
after it reported weak quarterly earnings for the January-March
period, hit by an impairment loss linked to its Chinese travel
business.
    Traders said volume may be subdued on renewed worries about
Ukraine. Pro-Moscow separatists in eastern Ukraine ignored a
public call by Russian President Vladimir Putin to postpone a
referendum on self-rule, declaring they would go ahead on Sunday
with a vote that could lead to war. 
    The broader Topix gained 0.7 percent to 1,167.94,
while the new JPX-Nikkei Index 400 added 0.7 percent
to 10,628.11.

 (Editing by Chris Gallagher)
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