Nikkei rebounds as exporters gain on weaker yen; insurers suffer

Sun Aug 24, 2014 10:48pm EDT

* Fed chair upbeat on U.S. economy in Jackson Hole
conference
    * Yen falls on diverging U.S.-Japan policy paths
    * Nikkei seen supported by buying by public accounts
    * Insurers hit by natural disasters

    By Tomo Uetake
    TOKYO, Aug 25 (Reuters) - Tokyo stocks rebounded on Monday
morning, spurred by gains for exporters as the yen weakened to a
seven-month low against the dollar after a gathering of central
bankers underlined the diverging paths of interest rates in
Japan and the United States.
    By the midday break, the benchmark Nikkei average 
rose 0.2 percent to 15,569.57 points. It shed 0.3 percent on
Friday, breaking a nine-day winning streak - the longest since
December.
    "Although the market dropped on Friday on profit-taking, the
yen's weakness is providing psychological support, or at least
making market players reluctant to sell," said Yasuo Sakuma,
portfolio manager at Bayview Asset Management.
    The dollar climbed to as high as 104.49 yen, as
investors wagered that interest rates in the United States would
rise much earlier than those in Japan and Europe.
    At a gathering of central bankers in Jackson Hole, Fed chair
Janet Yellen nodded to the concerns of some Fed officials about
the sustained level of monetary policy stimulus, even as she
stressed the need to move cautiously on raising rates.
 
    "After a choppy ride so far in 2014, it finally feels like
both the Nikkei and the yen are ready now for their next key
'leg up' in this extended Japan rally that began with Abenomics
back in late 2012," said Stefan Worrall, director of equity cash
sales at Credit Suisse in Tokyo. 
    Exporter led the way. Sony Corp advanced 0.8
percent, Panasonic Corp gained 0.6 percent and Toyota
Motor Corp edged the morning session up 0.4 percent.
    Murata Manufacturing Co Ltd rose 0.9 percent after
the electronic parts maker said it would buy the part of U.S.
radio frequency chipmaker Peregrine Semiconductor Corp 
it does not already own for $465 million in cash.
 
    Support for stocks was also seen on hopes of more buying
from the Bank of Japan and others in the domestic public sector,
including the $1.2 trillion Government Pension Investment Fund.
    Exchange data showed trust banks, which act on behalf of
public investors such as the GPIF, bought a net 82.7 billion
yen(794 million US dollar) of stocks last week, their largest
net buying in almost two months. 
    Insurers bucked the trend, with traders citing concerns over
a significant rise in insurance claims following severe damages
from torrential rains in western Japan. 
    The insurance companies subindex was the
third-worst performer among the Tokyo Stock Exchange's 33
industry sub-indexes on Monday morning, declining 0.6 percent. 
    Tokio Marine Holdings Inc and MS&AD Insurance Group
Holdings Inc shed 1.3 percent and 0.8 percent,
respectively.
    The broader Topix rose 0.2 percent while the new
JPX-Nikkei Index 400 added 0.1 percent.
(1 US dollar = 104.1900 Japanese yen)

 (Editing by Shri Navaratnam)