Nikkei edges up on Wall St gains, Kawasaki Kisen rises on ROE hope

Tue Aug 26, 2014 10:21pm EDT

* Kawasaki Kisen soars on report it will double ROE
    * Otsuka Holdings jumps on mid-term plan

    By Ayai Tomisawa
    TOKYO, Aug 27 (Reuters) - Japan's Nikkei share average edged
up on Wednesday morning after U.S. shares extended their gains,
while investors turned to  to individual shares such as Kawasaki
Kisen Kaisha, after a report it would double its return
on equity in the mid-term.
    The Nikkei rose 0.1 percent to 15,531.90 in
mid-morning trade after falling 0.6 percent on the previous day.
    Analysts said that investors held back from taking big bets
on major exporters because the weak yen trend has paused, with 
activity generally around companies with specific news of their
own.
    Shipping company Kawasaki Kisen jumped 5.1 percent to a
seven-month high after the Nikkei newspaper said that Kawasaki
Kisen will target a return on equity (ROE) of 10 percent and
earnings per share of 40 yen in its new five-year medium-term
management plan.
    Since the Tokyo Stock Exchange in January launched the
JPX-Nikkei 400 Index, which focuses on stocks with higher ROE,
the index has attracted attention also because Japan's
Government Pension Investment Fund adopted the JPX-400 as a
benchmark for some of its passive stock investments.
    "Foreign investors didn't believe that Japanese companies
will actually raise their ROEs, but when a specific report like
this comes out, it raises sentiment," said Takuya Takahashi, a
strategist at Daiwa Securities. "It stands out amid a lack of
macro factors."
    He said that an average Japanese company has an ROE of 9
percent.
    Also outperforming the market was Otsuka Holdings,
which jumped 5.4 percent on a five-year mid-term plan citing
earnings recovery and cost-cutting.
    Exporters were weak as investors took profits after the
dollar traded at 104.10 yen, holding under Monday's
7-month peak of 104.49.
    Toyota Motor Corp and Honda Motor Co both
fell 0.3 percent, and Canon Inc shed 0.1 percent.
    The broader Topix added 0.1 percent, and the
JPX-Nikkei Index 400 was flat at 11,686.84.

 (Editing by Eric Meijer)
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