TOKYO, June 13 Japan's Nikkei share average
inched up in early trade on Wednesday on Wall Street's overnight
advances but gains were limited as investors remain concerned
about Spain's struggle to finance its own debt.
The Nikkei rose 0.7 percent to 8,596.36, while the broader
Topix stepped up 0.3 percent to 726.78.
Most sectors were lifted from Tuesday's troughs, with
steelmakers outperforming the index. Nippon Steel
gained 2.4 percent, pushing the iron and steel sector
up 1.3 percent as the top performing sector.
"The market is the quietest it's been for a long time with
no big news out, although prices are looking stronger," said a
partner at a foreign hedge fund.
The Nikkei was supported by a 1.7 percent gain for heavily
weighted Fast Retailing Co Ltd, the operator of Uniqlo
clothing stores, bringing the stock price to 15,460 yen, but it
was still well below its 14-day moving average of 16,651.
Risk sentiment improved slightly, with investors relying
less on defensives, with both the food sector and
risk-off mainstay Japan Tobacco both underperforming
the market with a gain of 0.2 percent.
Nippon Paper Group Inc rose 1.5 percent after the
company said it would buy a 55 percent stake in Thai firm SCG
Paper Public Co and install machinery with a production capacity
of 43,000 tons at an SCG Paper Mill in spring 2014. The joint
venture, involving 5.5 billion yen ($69 million) of investment,
is to be concluded by the end of this month at the earliest.
Hitachi Ltd gained 1.3 percent after announcing
plans to buy German power plant service Xervon Energy GMBH for
several billion yen by the end of 2012, according to the Nikkei
Risk appetite was tempered after Spanish bond yields hit a
euro-era high on worries about the effectiveness of a bailout
agreed over the weekend for Spain's banks. They later eased off
these highs, helping U.S. stocks stage a comeback rally and rise
more than 1 percent.
The Nikkei closed down 1 percent at 8,536.72 on Tuesday on
doubts about the details of the Spanish bailout.
"There's not many domestic factors driving the Japanese
market at the moment so we're just swinging up and down in the
same territory," said Toshiyuki Kanayama, senior market analyst
Investors are also unwilling to make major changes to their
positions ahead of weekend Greek elections that could result in
Greece exiting the euro zone, as well as a G20 meeting next week
that many hope could produce a coordinated response to economic
turmoil in Europe.
Market players are also hoping the Bank of Japan will expand
its easing programme at a policy meeting that ends on Friday.
The BOJ bought 26.3 billion yen worth of exchange-traded funds
on Tuesday to support the market.
On June 4, the Nikkei hit a six-month low and the broader
Topix sank to a 28-year low due to concern about the
fate of the euro zone, as well as worries about an economic
slowdown in the U.S. and China. The Nikkei recovered to eke out
a weekly gain and snap a nine-week losing streak on Friday, its
worst run in 20 years.