October 3, 2012 / 3:05 AM / 5 years ago

Nikkei treads water as heavyweight gains offset Spain worries

* Fast Retailing strong, sales to reach 1 trln-Nikkei
    * Toyota gains after massive sales leap in U.S.
    * Investors leery of big moves ahead of week's events

    By Sophie Knight
    TOKYO, Oct 3 (Reuters) - Japan's Nikkei share average was
little changed on Wednesday morning as gains for index
heavyweights such as Fast Retailing Co were offset by
broader concerns over a bailout for Spain and volume ahead of
the week's macro events.
    Fast Retailing rose 4.2 percent, giving the benchmark 30 
positive points, after the Nikkei daily said the operator of
popular clothing firm Uniqlo should see sales top 1 trillion yen
($12.8 billion) in the year ending August 2013.
    Toyota Motor Co also lent support, rising 1.2
percent in heavy trade after its U.S. passenger car sales jumped
42 percent in September from the same month last year, as U.S.
monthly car sales struck their highest level since March 2008.
    Nissan Motor Co, however, saw a year-on-year
decline of 1.1 percent, leaving its share price down 0.8
    The Nikkei added just 9.1 points to 8,795.10 by midday on a
lack of larger incentives and as investors brooded over when, or
indeed whether, Spain will request a bailout after Prime
Minister Mariano Rajoy said he would not ask for one
    "We have problems with Greece and with Spain, but without
any really positive news out it's very difficult to judge where
a comfortable range for the Nikkei should be," said Yuuki
Sakurai, CEO of Fukoku Capital Management.
    Investors are also reluctant to move ahead of a series of
big events over the next few days with the European Central Bank
and the Bank of Japan both due to start policy meetings on
Thursday and U.S. payroll data due on Friday.
    "I think the BOJ is likely to loosen monetary policy because
they said they would act if the economy worsened, which their
last Tankan survey bore out," said Kyoya Okazawa, head of global
equities at BNP Paribas.
    Concern about dwindling global growth simmered as Australian
exports dropped 3 percent in August from the previous year as a
slowdown in China, the country's biggest export market, crimped
shipments of raw materials such as metals and coal.
    Investors fear Japanese firms' revenues in China will fall
sharply in September after Japanese factories and shops were
closed following protests triggered by a territorial dispute,
which remains unresolved.
    "The greatest concern for the market right now is how long
this dispute could drag on," Okazawa of BNP Paribas said.
    Despite that, the president of Murata Manufacturing Co Ltd
 said the precision machinery firm and Apple Inc
 supplier could escape those headwinds thanks to strong
demand from smartphone makers, and its Chinese factories were at
full capacity. The stock rose 0.7 percent.
    Analysts said a lack of major news was responsible for low
volumes, with institutional investors mostly remaining on the
sidelines through Wednesday morning.
    The broader Topix index seesawed through the morning
in thin trade, with volume at just 40.9 percent of its full-day
average over the past 90 days. The index dropped 0.2 percent to
    "A lack of incentives means even a little bit of news about
individual stocks will shift them disproportionately.
Institutional flow is extremely quiet today," said Okazawa.
    A case in point, NEC Corp rose 2.4 percent and Orix
Corp added 0.5 percent after the Nikkei business daily
said the firms would begin renting large-capacity storage
batteries to households to encourage domestic solar power use.
    Elsewhere, Daiichi Sankyo Co Ltd sagged 4.5 percent
to hit a record low after U.S. biotechnology company ArQule Inc
 said it will discontinue a late-stage trial of the two
companies' lung cancer drug after analysis showed the drug would
not improve overall survival rates.
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