Nikkei edges up 0.3 pct, Fast Retailing rises

* Seven & I, Fast Retailing among top pct gainers

* Canon falls after brokerage downgrade

* Technical indicator MACD close to turning bearish

* Support likely around 10,900, level of 25-day MA

By Masayuki Kitano

TOKYO, April 9 (BestGrowthStock) – Japan’s Nikkei average rose 0.3
percent on Friday, with gains in retailers offsetting
profit-taking in the wake of the index’s recent rally to 18-month
highs.

Retailers (.IRETL.T: ) were among the leading sub-index
gainers, with casual clothing chain Fast Retailing (9983.T: )
surging after reporting 43 percent growth in its first-half
operating profit, helped by strong sales at its Uniqlo budget
fashion chain. [ID:nTOE63404D]

The Nikkei hit an 18-month peak earlier this week but has
since pulled back, with investors booking profits as the yen
regained some ground after a recent slide, and due to concerns
the rally in equities may have gone too far, too fast.

But market players said it was too early to conclude whether
the Nikkei has shifted toward a downtrend, with support expected
near 10,900, roughly where its 25-day moving average now lies.

“Moves in the foreign exchange market (Read more about international currency trading. ) have settled down, and
I think we could see some renewed buying if the yen were to start
falling again,” said Hajime Nakajima, deputy general manager for
Cosmo Securities’ equity department.

Hopes for possible buying by two mutual funds to be launched
by Nomura Asset Management on April 16 that will invest in
so-called smart grid and cloud-computing related equities around
the world, may also lend the market support in the near-term,
Nakajima said.

The benchmark Nikkei (.N225: ) rose 36.14 points to 11,204.34,
recouping some ground after sliding 1.1 percent on Thursday for
its biggest one-day percentage fall in about six weeks.

The broader Topix index (.TOPX: ) rose 0.4 percent to 989.42.

Some 2.2 billion shares were traded on the Tokyo exchange’s
first section, off a one-month high of about 2.4 billion shares
reached on Wednesday. Advancing shares outnumbered declining ones
by more than 2 to 1.

The Nikkei hit an 18-month intraday high of 11,408.17 on
Monday, buoyed by market expectations for a sharp improvement in
corporate earnings and signs of a strengthening economic recovery
in the United States.

But MACD, a technical indicator, has since turned cautious,
with charts showing the MACD line edging down towards the signal
line and getting closer to flashing a sell signal.

RETAIL RISE

Japan’s largest retailer Seven & I Holdings (3382.T: ) climbed
6.1 percent to 2,456 yen after saying it would buy back up to 50
billion yen ($535.6 million) of its stock, equivalent to 2.21
percent of its shares outstanding and then cancel them.

Bic Camera Inc (3048.T: ) jumped 6.7 percent to 34,450 yen
after the consumer electronics retailer raised its full-year
operating profit forecast by 20 percent, buoyed by brisk sales of
high margin items like flat-screen TVs thanks to government
incentive programmes designed to encourage purchases of energy
efficient models.

Canon Inc (7751.T: ) fell 2.8 percent to 4,250 yen after
Goldman Sachs downgraded the electronics maker to “neutral” from
“buy,” though it raised its price target to 4,500 yen from 4,200
to reflect upward revisions to its estimates for the business
year ending in December 2010.

Kenichi Hirano, operating officer at Tachibana Securities,
said that while the Nikkei could dip to the level of its 25-day
moving average, currently at just over 10,900, it is unlikely to
break through it at this point unless some fresh selling factor
emerges.

“Even if there is a little selling, it’s unlikely the market
will slide that much. Neither institutional investors nor
foreigners, who have been such active buyers this year, appear
much interested in heavy selling,” he said.

Stock Market Analysis

(Additional reporting by Elaine Lies; Editing by Joseph Radford)

Nikkei edges up 0.3 pct, Fast Retailing rises