September 6, 2012 / 7:05 AM / 7 years ago

Japan's Nikkei flat as investors await ECB meeting

* Shippers hurt; source says FTC launched bid-rigging probe
    * Sharp sinks after Moody's cuts its debt rating to junk
    * ECB purchases could be bad for Spain, Italy - analyst
    * Yamaha Motors soars on Indonesia sales projections

    By Sophie Knight
    TOKYO, Sept 6 (Reuters) - Japan's Nikkei share average
closed flat o n Thursday, having barely stirred through the day
as investors anxiously awaited a policy review at the European
Central Bank, hoping for new measures to tackle the euro zone
debt crisis.
    Shares of shipping firms sank after a source said Japan's
Fair Trade Commission is investigating more than 10 companies
over possible bid-rigging and price-fixing for Japanese auto
shipments, although gains in index heavyweight Softbank Corp
 lent support.
    The Nikkei tiptoed up 0.75 point to 8,680.57,
snapping a five-day losing streak, its longest bearish run since
early July.
    Nippon Yusen KK dropped 5.3 percent and Mitsui
O.S.K. Lines sagged 2.7 percent, while Kawasaki Kisen
Kaisha Ltd pared gains to end flat, after company
representatives said FTC officials had been at their offices on
Thursday to investigate, but gave no further details. The FTC
declined to comment.
    The shipping sector has lost 32.3 percent this
year on thinning global demand and falling prices.
    "I can't see many people placing calls on the index right
now, it's likely to drop well below 8,500 for next week's
options settlement," said Fumiyuki Nakanishi, general manager of
investment research at SMBC Friend Securities.
    Sources told Reuters that the ECB is ready to waive
seniority status on government bonds it buys under a new
programme, which it is set to agree on at a Governing Council
meeting later on Thursday. 
    Market players say ECB action is now priced into the market,
but some remain uneasy about the consequences of the bank's
purchases of sovereign debt.
    "If the ECB buys Spanish and Italian bonds, it's likely to
ultimately be a bad thing for Spain and its banks as it will
scare away other investors from buying their bonds," said
    However, others said the scale of the programme would
determine whether it is a boon or a curse.
    "As long as the ECB don't buy an unlimited amount, I think
sellers will start to disappear," said Ryota Sakagami, chief
strategist of equity research at SMBC Nikko Securities.
    The broader Topix index inched up 0.1 percent to
719.00 in moderate trade. Volume was at 95.1 percent of the
full-day 90-day average.
    Losses in shares such as Sharp Corp -- which
dropped 4.3 percent after Moody's Investors Service cut the
short-term debt rating on the embattled TV maker to junk -- were
offset by gains in automakers, among others.
    "We have seen a pick-up in activity. We have got one of the
better flows we have seen for a while ... no real sector tilt,"
a senior dealer at a foreign bank said. "Our flow is balanced.
If our flow is representative of what's going in the market, our
flow suggests it's going to be flat."
    Yamaha Motor Co Ltd jumped 10.7 percent after its
president said the motorcycle maker expects to beat its annual
sales target in Indonesia of 2.4 million two-wheelers by some
100,000 units.
    Toyota Motor Corp rose 1.6 percent and Honda Motor
Co Ltd gained 1 percent after the companies posted
strong U.S. auto sales for August. 
    Softbank Corp gained 2.4 percent and was the most traded
stock on the main board as investors were upbeat about the
company after Chairman and CEO Masayoshi Son's presentation at
the Bank of America Merrill Lynch conference on Wednesday. Its
share price has gained 41.2 percent this year.
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