January 15, 2014 / 1:00 AM / 4 years ago

Nikkei bounces off 1-month low, buoyed by strong U.S. retail sales

4 Min Read

* Dec U.S. retail sales ease concerns about U.S. growth
    * Toshiba climbs to 5-1/2 month high after UK nuclear deal

    By Dominic Lau
    TOKYO, Jan 15 (Reuters) - Tokyo's Nikkei stock average
rebounded from a one-month low on Wednesday as a robust U.S.
retail sales report helped ease concerns about the pace of
growth in the world's largest economy - one of Japan's top
trading partners.
    The upbeat U.S. data also lifted the dollar from a four-week
low against the yen, giving currency-sensitive Japanese
exporters, such as Toyota Motor Corp and Sony Corp
, a fillip.
    A softer yen strengthens the competitiveness of Japanese
exporters abroad and their dollar earnings when repatriated.  
    The Nikkei was up 1.4 percent at 15,638.95 in
mid-morning trade after tumbling 3.1 percent on Tuesday, its
biggest one-day decline in five months, while the yen was quoted
at 104.135 per dollar, having fallen 1.2 percent
    "Programme (trades) are a bit more active today. On the cash
side, we are seeing a mix of long-only and hedge funds," a
Tokyo-based trader at a European bank said.
    "People are back to relatively flattish position. They have
more bullets behind, so any of kind of dips they would start
buying again."
    U.S. stocks rose on Tuesday, erasing much of the previous
session's steep drop. The December U.S. retail sales data
followed Friday's nonfarm payroll report, which came in sharply
below expectations, raising concerns about the pace of the U.S.
    The benchmark Nikkei has got off to a slow start this year
after rocketing 57 percent in 2013, energised by Tokyo's massive
fiscal and monetary stimulus to revive the world's third-largest
    Among exporters that rebounded from Tuesday's selloff were
Toyota, Mazda Motor Corp, Fuji Heavy Industries
 and Panasonic Corp, up between 1 and 2.7
    Mobile operator SoftBank Corp, the second top
performer after Mazda in 2013, was 25 percent more pricey than
its intrinsic value of 6,600 yen, Thomson Reuters StarMine data
showed. SoftBank was up 1 percent on Wednesday morning and the
third-most traded on the main board.
    Toshiba Corp, the second-most traded, climbed 4.3
percent after it had agreed to buy 60 percent of the NuGen UK
nuclear joint venture between GDF Suez and Spain's
Iberdrola for about $168 million.   
    Suntory Beverage & Food Co Ltd eased 0.5 percent
after gaining 0.3 percent in the previous session after parent
Suntory Holdings said on Monday it would buy U.S.
spirits company Beam Inc for $13.6 billion.
    The broader Topix index advanced 1.3 percent to
1,285.08, with volume at 20 percent of full daily average for
the past 90 trading days.
    In terms of valuation, Japanese equities carried a 12-month
forward price-to-book ratio of 1.28, a level not seen since late
May and much cheaper than the U.S. S&P 500's 2.4 and the
STOXX Europe 600's 1.63, Thomson Reuters Datastream
data showed.
    The JPX-Nikkei Index 400, a new gauge comprised
of firms with high return on equity and strong corporate
governance to appeal to investors which started trading on Jan.
6, gained 1.3 percent to 11,600.12.

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