Nikkei bounces sharply on yen's retreat, easing tensions in Ukraine

Sun Aug 10, 2014 10:10pm EDT

* GPIF shift positive catalyst for stocks in medium-term -
analyst
    * Yen's retreat lifts exporters
    * Some see Japanese stocks as being oversold

    By Ayai Tomisawa
    TOKYO, Aug 11 (Reuters) - Japanese stocks bounced strongly
on Monday morning, recouping some of their steep losses suffered
on Friday after Wall Street rallied on easing tensions in
Ukraine, and exporters rose as the yen stepped back from last
week's sharp gains. 
    The Nikkei share average jumped 1.7 percent to
15,031.59 in midmorning trade after dropping 3.0 percent on
Friday led by concerns the conflicts in Ukraine and the Middle
East could disrupt global growth.
    The benchmark has fallen nearly 5 percent from a six-month
high of 15,759.66 hit just over a week ago.
    News on Friday that Russia was ending military drills near
the Ukrainian border helped U.S. stocks post their best one-day
gain since March.
    Some analysts attributed Monday's gains to a technical
rebound as simmering tensions in Iraq remain a worry, although
others say the Japanese market was oversold in a short space.
    "Friday's selling seemed a bit irrational," said Hiromichi
Tamura, chief strategist at Nomura Securities. 
    He expects buying to return on positive factors such as
plans by the Government Pension Investment Fund to boost the
weighting of domestic stocks to more than 20 percent from a
current 12 percent target.
    "In the mid-term, such good news can serve as a positive
catalyst," Tamura said.
    The dollar bought 102.13 yen, having bounced off
Friday's two-week trough of 101.51, giving exporters a boost as
a weaker yen helps lift earnings when repatriated. 
    Honda Motor Co rose 0.9 percent, Sharp Corp
 jumped 3.0 percent and Hitachi Ltd rallied 1.9
percent.
    Fujifilm Holdings Corp rose 2.4 percent after  the
Nikkei and other media reported last week that a drug from the
company has emerged as a key candidate for treating the Ebola
virus, which has killed nearly 1,000 people in Africa during a
recent outbreak. 
    The broader Topix gained 1.2 percent to 1,242.50,
and the JPX-Nikkei Index 400 added 1.2 percent to
11,305.10.
    

 (Editing by Shri Navaratnam)
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