Nikkei jumps on weaker yen, Wall St gains; Nissan, Sharp soar

Mon May 12, 2014 10:08pm EDT

* Volume key for whether gains to continue - analyst
    * Sharp soars as forecast seen as too conservative
    * Nissan jumps as investors reconsider cheap valuations -
fund manager

    By Ayai Tomisawa
    TOKYO, May 13 (Reuters) - Japanese stocks jumped on Tuesday
as a weaker yen and a record close on Wall Street boosted
investor sentiment, while Nissan Motor and Sharp gained on hopes
that their perceived conservative forecasts suggested more
upside to their earnings.
    The benchmark Nikkei share average was up 1.8
percent at 14,405.06 in midmorning trade, trading above its
25-day moving average for the first time since April 25.
    The Dow and S&P 500 hit record closing highs
on Monday, as strong corporate results and an improving economic
outlook spurred a broad rally on Wall Street. 
    "The Japanese market's gain should be temporary as it's
merely benefiting from strong U.S. shares," said Masashi Oda,
chief investment officer at equity investment department of
Sumitomo Mitsui Trust Bank. "If volume is high at the end of the
day, we may see more rallies in days ahead."
    Nissan surged 5.4 percent to a one-month high of
916 yen, after forecasting 405 billion yen ($4 billion) in net
profit for this financial year. Although it missed the average
forecast of 425.4 billion yen in a Thomson Reuters I/B/E/S poll
of analysts, traders said the company's guidance was too modest.
 
    "Investors sold off Nissan last year after the company cut
its forecasts," said a fund manager at a Japanese asset
management firm. "The stock is trading below its book value, and
they realized it's overly sold. An appropriate level should be
around 1,000 yen."
    Similarly, Sharp soared 7.7 percent to a three-week
high of 279 yen after the company issued forecasts that traders
said were too conservative given the expected strength in
Sharp's solar and LCD businesses.    
    Exporters gained after the yen slipped to a one-week low
against the dollar. Dollar/yen last traded at 102.22.
    Toyota Motor Corp gained 1.6 percent and Sony Corp
 added 2.5 percent.
    The broader Topix rose 1.6 percent to 1,175, while
the new JPX-Nikkei Index 400 advanced 1.6 percent to
10,710.45.

 (Editing by Chris Gallagher)
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