Nikkei edges up, but gains limited on yen

* Nikkei edges up on short-covering but yen caps topside

* Mazda eases on news Ford to sell most of its Mazda shares

By Chikafumi Hodo

TOKYO, Oct 18 (BestGrowthStock) – Japan’s Nikkei average edged up on
Monday on short-covering after losing nearly 1 percent the
previous session, but gains were limited as the yen stayed near a
15-year high against the dollar.

The market struggled to find clear direction due to a dearth
of immediate market-moving incentives, with investors looking to
take cues from the Group of 20 nations meeting later in the week
and the Federal Reserve’s monetary policy early next month.

Shares of Mazda Motor Corp (7261.T: ) erased early losses to
close the morning session down 0.5 percent at 213 yen after a
source with knowledge of the matter said Ford Motor Co (F.N: ) was
planning to sell almost all its remaining stake in the Japanese
auto company. [ID:nTOE69F00H]

Mazda shares dropped to as low as 204 yen on the day.

“The Nikkei rebounded on short-covering after last week’s
loss but the market is having difficulty finding clear direction
without any new incentives,” said Nagayuki Yamagishi, a
strategist at Mitsubishi UFJ Morgan Stanley Securities.

The benchmark Nikkei (.N225: ) closed the morning session up
0.5 percent, or 47.41 points, at 9,547.66.

The broader Topix (.TOPX: ) rose 0.9 percent to 833.84.

The Nikkei drew support from the Nasdaq (.IXIC: ), which rose
more than 1 percent as Google surged after blowout third quarter
results on Friday, but traders were expected to be careful about
chasing Japanese shares on rallies as the yen remained strong.

The yen inched up to 81.30 (JPY=: ) against the dollar, holding
near a 15-year high of 80.88 reached on the EBS platform last
week.

Traders were reluctant to take large fresh positions due to a
lack of trading factors.

“The Nikkei is likely to trade in a narrow band around 9,500.
The focus is on the yen but the forex market (Read more about the difference between the forex market and the stock market. ) is expected to be
nervous ahead of the G20 meeting this weekend,” said Masayoshi
Yano, a senior market analyst at Meiwa Securities.

Other traders said the strength of the yen has been having a
limited impact on Japanese shares as the Nikkei has been
performing relatively well despite the yen’s rise.

“Basically, foreign funds are flowing into Japan given the
current ample liquidity situation in global markets,” said
Ryosuke Okazaki, chief investment officer at ITC Investment
Partners Corp.

“Japanese shares have lagged behind others, but they are now
starting to catch up despite the yen’s strength against the
dollar. Some shares are rising as the yen is strong against the
dollar, but not necessarily strong versus the euro.”

In individual shares, Mazda’s fall was seen having only a
limited effect on the broader stockmarket.

“The Mazda news is not having an impact on prices overall as
it was not a big surprise to the market,” Yamagishi said.

Shares of Toyota Motor (7203.T: ) gained 1.9 percent to 2,948
yen on Monday after the Asahi newspaper reported on Saturday the
world’s largest carmaker is considering building its second car
plant in Mexico to boost local output due to the yen’s strength.
[ID:nTOE69D02K]
(Reporting by Chikafumi Hodo; Editing by Joseph Radford)

Nikkei edges up, but gains limited on yen