March 16, 2012 / 3:35 AM / 5 years ago

Japan's Nikkei hovers around 8-month closing high

4 Min Read

* Exporters ease, taking cues from yen moves
    * Gree up on report of U.S. expansion, upbeat broker note

    By Dominic Lau	
    TOKYO, March 16 (Reuters) - Japan's Nikkei share
average was steady on Friday after hitting an eight-month
closing high a day earlier, with exporters witnessing mild
selling after their strong rally in the previous session.	
    The yen's recovery from an 11-month low against the dollar
prompted exporters to give back some of the previous day's
gains, with Sony Corp down 0.5 percent, Honda Motor Co
 falling 0.6 percent and industrial robot maker Fanuc
Ltd easing 0.3 percent.	
    The yen was last traded at 83.42 to the dollar after
weakening as far as 84.187 on the EBS trading platform on
Thursday.	
    The Nikkei eased 0.1 percent to 10,116.32 by the
midday break, while the broader Topix added 0.1 percent
to 864.55.	
    Trading volume on the main board after the morning session
was 55.8 percent of its full daily average for the past 90 days.	
    "We need to take a breather here," a dealer at a foreign
bank said. "Going into the end of the fiscal year, the index
wants to kind of move up a bit but it feels like there is a need
for domestic supply to come out. It's a little bit quiet ahead
of the holiday on Tuesday."	
    March is the final month of Japan's fiscal year and market
participants have been expecting many funds to lock in profits
from the benchmark's nearly 20 percent rally since the beginning
of January, after shedding more than 13 percent from April to
December.	
    A sharp increase in funds raised by equity investment trusts
launched in March has also added fuel to the Japanese market's
rally.	
    Nomura expected the total assets of these equity investment
trusts to hit 88 billion yen ($1.05 billion) this month, the
highest since February 2006. That compares with an average of 13
billion yen a month in 2011.	
    Nomura expected the Nikkei would head towards 10,500 to
11,000 during April-May.	
    Underscoring the upbeat outlook, the Nikkei volatility index
, Japan's fear gauge, fell 6.6 percent. The lower the
volatility index, the higher the risk appetite.	
    	
    SHIPS & STEEL	
    Naomi Fink, Japan equity strategist at Jefferies Japan,
expected the Nikkei to rise further although market momentum
would slow.	
    Fink favoured shippers and steelmakers, saying they were
solid picks for a recovery cycle.	
    Shippers and steelmakers carried a 12-month forward
price-to-book ratio of 0.63 and 0.74 respectively, versus their
10-year average of 1.4 and 1.3, and cheaper than the 0.96 for
the Topix, data from Thomson Reuters Datastream showed.	
    The shippers' subindex rose 1.9 percent on
Friday, although the iron & steel sector lost 0.6
percent.	
    Topping the turnover chart was Gree Inc, up 4
percent after a media report that it would release its first
social networking game designed for the global market in the
United States.	
    Gree also got a boost from a Citigroup report which said
that fears of stricter regulation on social gaming operators
similar to those on Japan's "pachinko", a pinball-like gambling
game, were overdone.	
    Short interest in Gree remained high, with 8.63 percent of
outstanding shares on loan as of March 14 versus 8.49 percent on
March 1, according to research firm Data Explorers.

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