* Retail investors pick up underperformers such as Sharp,
* Sony Financial falls after earnings guidance disappoints
* SoftBank slips, Sprint permitted discussions with Dish
By Dominic Lau
TOKYO, May 21 Japan's Nikkei share average hit a
5-1/2-year high on Tuesday, reversing earlier losses as retail
investors scooped up underperforming stocks such as Sharp Corp
and Tokyo Electric Power Co Inc.
By the midday break, the Nikkei inched up 0.1
percent to 15,369.13 after trading as high as 15,388.37, its
best mark since December 2007. The index was down as much as 0.6
percent earlier in the session on profit-taking after Wall
Street finished flat.
"Institutional investors are actually rather quiet today. It
seems to be more retail-investor-driven today," a senior trader
at a foreign bank said.
"A lot of the laggards in the once hated stocks, like Sharp,
TEPCO, Mitsubishi Motors, Kobe Steel and Tokuyama, are up on
Sharp, TEPCO, Mitsubishi Motors Corp, Kobe Steel
Ltd and chemical manufacturer Tokuyama Corp
soared between 11.7 and 21.2 percent.
Tepco was the most traded stock on the main board by
turnover, followed by Sharp and Mitsubishi Motors.
The benchmark Nikkei has rallied nearly 48 percent this year
on the back of aggressive government and central bank policies
to revive the economy, and it has risen more than 8 percent
since May 9, when the dollar broke above the 100-yen mark.
The yen last traded at 102.53 to the dollar on
Tuesday, rebounding from a 4-1/2-year low of 103.32 hit on
Japanese shares carry a 12-month forward price-to-earnings
ratio of 15.9, a level not seen since May 2010 but still below
its 10-year average of 16.3, data from Thomson Reuters
"One recent trend is that investment trusts are big buyers
in the market," said Jun Yunoki, an analyst at Nomura
"As the market is going up, the momentum is gaining for them
to invest in Japanese stocks."
Another trader said many investors were focusing on the Bank
of Japan's two-day meeting, which concludes on Wednesday. The
central bank is expected to stand pat on monetary policy, but it
may seek ways to calm the bond market over the recent volatility
it has experienced.
The broader Topix index gained 0.3 percent to
1,272.66 in active trade, with volume at 93 percent of its full
daily average for the past 90 trading days.
As stocks rallied, the spread between Topix's dividend yield
and the 10-year Japanese government bond yield
narrowed to 0.70 percent on Monday, a level not seen since April
2011, according to Datastream.
Other notable movers on Tuesday included SoftBank Corp
, down 3 percent. U.S. wireless operator Sprint Nextel
Corp said it has received a waiver from SoftBank allowing
it to engage with Dish Network Corp in discussions over
a proposed offer, although Sprint said its recommendation in
favour of the SoftBank offer has not changed.
Sony Financial Holdings Inc dropped 2 percent after
it forecast a net income of 37 billion yen for the current
business ending March 2014, below an average of 43.05 billion
yen from 11 analysts polled by Thomson Reuters I/B/E/S.