Nikkei claws higher

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 0.3 percent on Wednesday as exporters gained on strong U.S. data, but a drop in shares of Toyota Motor Corp weighed after its recall woes hit its U.S. sales.

Pioneer jumped more than 6 percent after a newspaper reported that Mitsubishi Chemical Corp will likely take a small stake in the electronics maker to jointly develop organic electroluminescent lighting equipment.

But Fast Retailing tumbled after the operator of the Uniqlo casual-clothing chain said its sales fell in January from the same month last year, the first drop in six months.

Despite big moves in individual stocks, analysts said a wait-and-see mood was spreading in the overall market ahead of U.S. jobs data on Friday and amid growing credit worries over European countries such as Greece.

“Earnings in both Japan and the United States have been solid, but investors find it hard to keep pushing up the market until they see market reactions to the jobs data,” said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.

“If the data turns out to be strong, that would spark worries about the possibility of rate hikes, even though not immediately, and if it’s poor that itself would be negative for the market.”

The benchmark Nikkei rose 33.24 points to 10,404.33, while the broader Topix gained 0.3 percent to 915.68.

Market players said that while it would not be surprising for the Nikkei to try to break above its 25-day moving average, currently around 10,600, the market remained vulnerable to profit-taking.

Greek government bond spreads widened on Tuesday, with investors nervously awaiting the European Commission’s verdict due mid-week on the troubled country’s budget plans.

But rising sales of previously owned U.S. homes and robust earnings from U.S. bellwethers in the consumer and industrial sectors pointed to a steady rebound in demand, sending Wall Street higher for a second day on Tuesday.

After the bell, Honda Motor Co lifted its annual outlook for the third time after a recovery in global auto sales and a weaker-than-expected yen helped it achieve its strongest quarterly operating profit in a year and a half.

Shares of Honda, Japan’s No.2 carmaker, ended trade up 2.3 percent at 3,140 yen prior to the announcement.

PROBLEMS CONTINUE AT TOYOTA

Toyota shares shed 5.7 percent to 3,400 yen after its recall woes sent U.S. sales tumbling 16 percent in January, and after a U.S. official said the government could take the unusual step of announcing a civil penalty against Toyota.

In addition, Toyota is facing a growing number of lawsuits from consumers who complain their vehicles suddenly accelerate or may do so, and want the world’s largest automaker to pay for it.

On Wednesday, Toyota also said its North American and Japanese dealers had received several dozen complaints over what drivers characterized as insufficient braking on the new Prius hybrid when driving over bumpy or frozen roads.

“On top of the recall in America, the company now has problems with the Prius in Japan. All these could potentially lead to hurting Toyota’s stronghold as the top automaker in terms of quality,” said Mitsuo Shimizu, deputy general manager at Cosmo Securities.

“Investors’ focus at the earnings announcement (on Thursday) will be how much losses it will incur from the recall.”

Fast Retailing lost 3.1 percent to 14,560 yen to become the biggest drag on the Nikkei 225, after same-store sales at Uniqlo fell in January due to a shortage of inventory after robust sales the previous month.

But Pioneer climbed 6.6 percent to 373 yen. The Nikkei business daily said Mitsubishi Chemical Corp will likely invest 1-1.5 billion yen ($11.1-16.6 million) to take a small stake in the electronics maker and the two firms will jointly develop organic electroluminescent lighting equipment.

Among exporters, Canon Inc rose 1.4 percent to 3,660 yen and Olympus advanced 3 percent to 2,860 yen.

Nippon Oil and other oil-linked shares extended gains after oil soared 3.8 percent on Tuesday, its biggest percentage gain in four months, on optimism about economic recovery and weakness in the dollar.

Nippon Oil, a refiner, rose 4.5 percent to 465 yen and Nippon Mining Holdings climbed 4.6 percent to 430 yen. Oil and gas field developer Inpex gained 1.2 percent to 678,000 yen.

Some 2.1 billion shares changed hands on the Tokyo exchange’s first section, steadily slowing after marking the highest volume in seven months above 3 billion shares in January.

Advancing stocks outnumbered declining ones by nearly 3 to 1.

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(Editing by Michael Watson)

Nikkei claws higher