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Nikkei rises 2 pct after JPMorgan, U.S. retail data
October 15, 2009 / 2:35 AM / in 8 years

Nikkei rises 2 pct after JPMorgan, U.S. retail data

* Nikkei breaks resistance near 10,140, rises over 2 pct

* Exporters strong after Dow breaks above 10,000

* Banks gain in wake of JPMorgan results

* Elpida jumps after posting profit, seen as good sign

By Elaine Lies

TOKYO, Oct 15 (Reuters) - Japan’s Nikkei stock average climbed 2.1 percent on Thursday, bolstered by exporters such as Sony Corp (6758.T) after robust U.S. company results and data pushed the Dow over 10,000 for the first time in a year.

Mitsubishi UFJ Financial Group (8306.T) and other banks gained in the wake of good results from JPMorgan Chase & Co’s (JPM.N), boosting hopes other major Wall Street banks will report strong results this week. [.N]

U.S. retail sales, excluding autos, rose for a second month, offering cautious optimism that spending would support the economy as it struggles out of recession. [ID:nN14236340]

“Nobody thought that consumer spending would suddenly surge so these figures are pretty good, they verify a slow and steady recovery,” said Hideyuki Ishiguro, a supervisor at the investment advisory section of Okasan Securities.

"But there are signs that the market may not rise all that much more today, particularly since foreign investors didn't seem to be all that keen on Japanese shares in comparison to other Asian share markets yesterday. I think there's still some concern about earnings." The benchmark Nikkei .N225 rose 212.41 points to 10,272.62, while the broader Topix .TOPX rose 1.6 percent to 909.01.

The Nikkei surged through resistance that had developed around 10,140 -- the level of its 25-day moving average -- and market players said one key focus of the day would be whether it manages to close above that level.

Investor optimism about U.S. earnings, already strong after good results from Intel Corp (INTC.O) this week, was further bolstered when JPMorgan’s quarterly profit rose sharply.

The Dow Jones Industrial average .DJI rose above 10,000 for the first time in a year, to 10,015.86 for a gain of 1.5 percent. Other U.S. indexes all rose more than 1 percent.

“Given the gains in the Dow and the general mood of global stock markets, it wouldn’t be that surprising to see the Nikkei rise as far as 11,000,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. “But Japan still lags overseas markets, and we’re not seeing the same fund inflows that they are.”

BANKS, EXPORTERS

Among banks, top lender Mitsubishi UFJ Financial Group (8306.T) rose 2.3 percent to 496 yen, No. 2 bank Mizuho Financial Group (8411.T) gained 1.1 percent to 179 yen and Sumitomo Mitsui Financial Group (8316.T) advanced 2.1 percent to 3,340 yen.

But some in the market were doubtful about how long this would continue, noting that the prospect of a loan moratorium proposed by Banking Minister Shizuka Kamei still hung over the market.

“Financial shares are likely to see some short-covering after the JPMorgan results, but fundamentally it’s still too early to see a real recovery in this sector, and this will help limit the Nikkei’s rise,” said Kenichi Hirano from Tachibana Securities.

Attention is also on more U.S. financial results this week, including Goldman Sachs (GS.N) and Citigroup (C.N) on Thursday. [SP500/WK] [RESF/US]

Exporters climbed, with Sony up 3.8 percent to 2,605 yen, Honda Motor Co (7267.T) gaining 2.5 percent to 2,830 yen and Toyota Motor Corp (7203.T) rising 2.2 percent to 3,650 yen.

Elpida Memory 6665.T jumped 5 percent to 1,285 yen after saying that it had posted an operating profit of 500 million yen in the three months to the end of September against a loss of 24.5 billion yen a year earlier.

“This Elpida news may be taken as a sign that the whole sector is likely to see earnings recovery, with autos also likely to do pretty well,” said Ishiguro at Okasan Securities.

Trade was moderate, with 1 billion shares changing hands on the Tokyo exchange’s first section compared with last week’s morning average of 980 million.

Advancing shares outnumbered declining ones by more than 4 to 1. (Reporting by Elaine Lies; Editing by Edwina Gibbs)

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