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Nikkei choppy ahead of US jobs data; Egypt, Portugal developments eyed
July 4, 2013 / 1:35 AM / in 4 years

Nikkei choppy ahead of US jobs data; Egypt, Portugal developments eyed

* Egypt, Portugal developments eyed - analyst
    * Upside likely around 14,500 in next few weeks - analyst
    * Suntory Beverage and Food extends gains

    By Ayai Tomisawa
    TOKYO, July 4 (Reuters) - Japan's Nikkei share average edged
up in choppy trade on Thursday as investors were cautious ahead
of crucial U.S. jobs data on Friday, while worries over
political turmoil in Egypt and Portugal dampened sentiment.
    The Nikkei gained 0.1 percent to 14,070.93 in midmorning
trade after opening a touch lower.
    Analysts said the market was underpinned on modest gains in
U.S. stocks before the Independence Day holiday on news of
surprisingly strong private sector job creation. Although the
country's services sector data showed unexpectedly weak growth,
investors took comfort from the survey's employment gauge.
    "Investors are focused on Friday's U.S. jobs data, so they
won't take large positions today... but it's a good sign that
U.S. stocks rose before the holiday," said Hiroichi Nishi, an
assistant general manager at SMBC Nikko Securities. "Volume is
likely to stay low because of fewer participants as the U.S.
markets will be closed later today."
    Still, while some exporters gained as the dollar is trading
around 100 yen, the market is cautious about the yen's levels
due to unrest in Egypt and political turmoil in Portugal, where
talks over the government's future threatened to reignite the
euro-zone crisis.
    Sony Corp gained 0.9 percent and Nikon Corp
 added 1.4 percent.
    The dollar last traded at 99.93 yen.
    Suntory Beverage and Food Ltd climbed 1.6 percent
at 3,195 yen, extending its previous session's 1.5 percent rise
from its initial public offering price of 3,100 yen.
    The stock will be added to the large cap segment of the MSCI
Global Standard Indices after the close of July 17, traders
said, adding that passive fund managers are expected to
rebalance their portfolio by adding Suntory Beverage shares.
    The Topix shed 0.1 percent to 1,172.42.
    Traders expect some volatility in the Nikkei in the next few
weeks ahead of major events such as U.S. Federal Reserve
Chairman Ben Bernanke's speech next week and Japan's upperhouse
election later this month.
    "The market could see volatility depending on the outcomes
of these events this month," said Nobuhiko Kuramochi, a
strategist at Mizuho Securities. "But the Nikkei is gaining
momentum on a weak yen and U.S. economic recovery hopes, and its
upside is likely be around 14,500."
    Market participants also said that investors are focused on
developments in Egypt, where at least 10 people were killed when
opponents and supporters of the country's deposed president,
Mohamed Mursi, clashed after the army announced his removal on
    In Portugal, the 10-year bond yield shot above 8 percent and
its stock market slumped 5 percent on fears a snap election
could derail Lisbon's exit next year from a bailout by the
European Union and International Monetary Fund. 
    The Nikkei has dropped 11.7 percent since reaching a 5-1/2
year high on May 23, hurt by slowing growth in China, worries
about an imminent rollback of the U.S. Federal Reserve's
stimulus and disappointment over the Japanese government's
recently unveiled growth strategy.

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