July 1, 2013 / 1:31 AM / 4 years ago

Nikkei choppy after Friday's surge, bank stocks in demand

* Nikkei down 0.2 pct, Topix up 0.4 pct
    * Equities' 12-mth fwd P/E falls to level last seen in early

    By Dominic Lau
    TOKYO, July 1 (Reuters) - Japan's Nikkei average seesawed on
Monday morning after posting its biggest one-day rise in three
weeks in the previous session, although long-only investors were
picking up banking shares. 
    The Nikkei slipped 0.2 percent after trading as low
as 13,624.90 and as high as 13,746.72. The index jumped 3.5
percent to a three-week high of 13,677.32 on Friday. 
    "Volume overall is on the light side. There is not a whole
lot of trend of what we are buying recently. But it does seem
like there is a bit of banking buying today," a senior trader at
a foreign bank said, adding that his bank's buy orders outpaced
sell orders.
    "Better activity from long-only investors, more so than
hedge funds. "Maybe it's because Hong Kong is off that were are
seeing less volume from (hedge funds) today"
    Lender Sumitomo Mitsui Financial Group, up 2.3
percent, was the most traded stock on the main board by
turnover, followed by rival Mitsubishi UFJ Financial Group
, up 2.6 percent.
    The senior trader said investors remained cautious on China,
Japan's second-largest export market, ahead of the final reading
of the June Purchasing Managers' Index, due out at 0145 GMT.   
    Some currency-sensitive exporters were supported by a weaker
yen. The Japanese currency was last traded at 99.35 yen to the
dollar, down from Friday's high of 98.370, as investors resumed
pricing in the possibility of the U.S. Federal Reserve beginning
to scale back its bond-buying programme as soon as its September
policy meeting.
    Among the exporters on the rise were Daikin Industries
, Toyota Motor Corp, Mazda Motor Corp 
and Sony Corp, up between 0.5 and 3.4 percent.
    Japanese manufacturers' sentiment turned positive in the
three months to June for the first time in nearly two years, the
Bank of Japan's quarterly Tankan survey showed, a sign the
recent market turbulence has yet to hurt the feel-good mood
created by the government's reflationary policies.
    The broader Topix index gained 0.4 percent to
1,138.18, with volume at 19 percent of its full daily average
for the past 90 trading days.
    On the losing ledger, wireless operators SoftBank Corp
 and KDDI Corp slipped 0.9 and 1.2 percent,
    The Nikkei rallied more than 80 percent to a 5-1/2 year peak
 on May 23 since November, when prime minister Shinzo Abe's
election campaign promised bold fiscal and monetary expansionary
policies to revive the world's third-largest economy, dubbed
    But since then, the benchmark has lost 14 percent on
concerns over the Fed paring its stimulus, slowing growth in
China, and disappointment over Abe's growth strategies.
    Japanese equities' 12-month forward price-to-earnings ratio
fell to 13.3 - a level not seen since early April - from a
three-year high of 16.3 reached four weeks ago according to
Thomson Reuters Datastream.
    The Nikkei is still up more than 10 percent since the BOJ
announced radical monetary stimulus on April 4 and has risen 31
percent this year.

Our Standards:The Thomson Reuters Trust Principles.
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