Nikkei rises for fifth day, led by exporters
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TOKYO, May 16 (Reuters) - Japan's Nikkei stock average rose 0.2 percent on Friday, extending gains into a fifth day as stocks tracked overnight gains on Wall Street, led by exporters such as Honda Motor Co Ltd (7267.T).
Stocks pared earlier gains as investors locked in profits and technical charts suggested the market may be overheated, with the Nikkei dipping into negative territory at one stage.
Still, many market participants said the Tokyo market remained on a solid upward trend as pessimism about the economic outlook recedes.
"The investment environment is improving. Many see the market as very strong," said Yoshihiro Ito, managing director at Okasan Asset Management.
"This week, we are seeing buying interest beyond rewinding of short positions. Money is flowing back to the equity market from safety assets like bonds."
The benchmark Nikkei .N225 ended the morning up 21.97 points at 14,273.71. The broader TOPIX index rose 0.7 percent to 1,402.23.
Investors had worried about Japanese companies' earnings outlooks this year, which were expected to project sharp profit declines due to a stronger yen and surging raw materials costs.
But they have taken heart as the dollar hovers around 104 yen, which many have found comfortably above firms' forecasts.
"With the dollar at the current level and given that many companies' outlooks are based on 100 yen, there is the possibility of an upward revision of profit forecasts," said Kenichi Hirano, operating officer at Tachibana Securities.
Honda Motor rose 2.9 percent to 3,520 yen. Toyota Motor Corp (7203.T) gained 0.7 percent to 5,420 yen.
MIZUHO JUMPS
Mizuho Financial Group (8411.T) leapt 3.4 percent to 555,000 yen after Japan's second-largest bank said it aimed to buy back up to 400 billion yen ($3.8 billion) of its own shares in the current year.
The bank booked its first quarterly loss in five years on Thursday, hit by a $2.9 billion subprime meltdown at its brokerage unit, but forecast a rebound. [ID:nT237906]
Other banks also climbed, with No.1 Mitsubishi UFJ Financial Group (8306.T) up 2.9 percent at 1,111 yen and Sumitomo Mitsui Financial Group (8316.T) rising 2.7 percent to 887,000 yen. The market also got a boost from shippers after the chief sea freight index .BADI soared to a record high on demand for natural resources in China and India, and congestion at key ore and coal export terminals.
Nippon Yusen KK (9101.T) gained 2.2 percent to 1,105 yen, Mitsui OSK Lines Ltd (9104.T) climbed 4.4 percent to 1,650 yen and Kawasaki Kisen Kaisha Ltd (9107.T) rose 4.5 percent to 1,244 yen.
Trade picked up, with 1.1 billion shares changing hands compared to the 933 million morning average last week.
Decliners outnumbered advancers 833 to 767.
(Editing by Brent Kininmont)
