Nikkei edges higher on weaker yen, autos strong

* 25-day moving average around 11,000 resistance for now

* Isuzu climbs after raising earnings estimate

By Elaine Lies

TOKYO, April 20 (BestGrowthStock) – Japan’s Nikkei average clawed up
0.4 percent on Tuesday, a day after its biggest percentage loss
in two months, as concerns about fraud charges against Goldman
Sachs waned and the yen fell back.

Carmakers rose, with Isuzu Motors (7202.T: ) up following an
outlook hike and Suzuki Motor (7269.T: ) gaining after a report
that it plans to boost output in India. [ID:nSGE63I0LU]

But gains were limited, with investors still wary after
concern about Goldman revived long-term worries about tighter
financial regulation, while worry about Chinese attempts to
control the real estate market there sent Shanghai shares
tumbling.

Market players said the news that the Securities and Exchange
Commission charged Goldman Sachs with fraud over its handling of
a debt product tied to subprime mortgages had mainly been used as
an excuse to take profits.

“The market’s taking a bit of a breather today after being
sold so sharply yesterday, but it’s still hard to predict
direction and we can’t say the yen is definitely weakening,” said
Kenichi Hirano, operating officer at Tachibana Securities.

“If the dollar could rise to 93 yen, the mood in the market
would really change. But technically, the picture for stocks
right now isn’t that good.”

The benchmark Nikkei (.N225: ) gained 46.24 points to 10,955.01
after falling 1.7 percent to 10,908.77 on Monday. The broader
Topix (.TOPX: ) gained 0.6 percent to 976.69 yen.

The Nikkei’s 25-day moving average, currently just a little
above 11,000, is likely to prove short-term resistance,
particularly given the gap created between 11,084 and 10,953.

Initial support lies near 10,800, roughly the 38.2 percent
retracement of a two-month rally that started in early February
and pushed the Nikkei up to an 18-month peak of 11,408.17 in
early April. Below that the 50 percent retracement of that same
rise lies roughly around 10,600.

But the benchmark’s losses over the past two trading days
have sent its relative strength index (RSI) down as far as 48
from a high last week of 76. Anything from 70 and above is
considered overbought, while 30 and below is oversold.

“Given that the Nikkei has fallen some 3.2 percent over the
last two trading days, investors are likely to buy at first on
the sense that prices are now comparatively good, with a halt in
the yen’s rise boosting exporters,” said Hiroichi Nishi, general
manager at the equity division of Nikko Cordial Securities.

“But there’s a lot of uncertainty out in the international
markets, including China’s recent steps to control the real
estate market, as well as various international meetings.”

Beijing on Monday ordered local governments to take steps to
control speculative buying in real estate, sending Shanghai
shares (.SSEC: ) tumbling nearly 5 percent. [ID:nTOE63G016]

Shanghai extended those losses 0.1 percent, and market
players said Japanese investors were keeping a wary eye on
activity there.

With Japanese results set to move into full gear from next
week, the market is growing increasingly attentive to earnings
reports and forecasts, though market players warned that high
expectations could lead to falls if results are merely in line
with forecasts.

Shares of Omron Corp (6645.OS: ) rose 2.8 percent to 2,154 yen
after the maker of control equipment for factory lines raised its
profit and sales forecasts for the year ended last month on
improved economic conditions and higher capital spending by its
clients.

Omron said it now expected to post an operating profit of 13
billion yen for the year ended March 31, 3 billion yen higher
than its previous forecast. It lifted its sales estimate by 1
percent to 524 billion yen. [ID:nT19GG51VX]
(Reporting by Elaine Lies; Editing by Joseph Radford)

Nikkei edges higher on weaker yen, autos strong