Nikkei gains as dollar rises on Geithner comments

By Chikafumi Hodo and Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei stock average rose 0.2 percent on Thursday, bouncing back from an early loss after the dollar jumped against the yen on comments by U.S. Treasury Secretary Tim Geithner.

Geithner, in an interview published by the Wall Street Journal on Thursday, said major currencies were roughly in alignment now. The paper said the comments suggested he saw no need for the dollar to sink more than it already had against the euro and the yen.

The interview boosted the dollar and pulled the benchmark Nikkei out of negative territory, where it had been weighed down as the yen held near a 15-year high against the U.S. currency.

“The Nikkei rebounded strongly after the dollar jumped against the yen on Geithner’s comments,” said Takashi Ohba, senior strategist at Okasan Securities.

“This could have prompted active short-covering by foreign players who were detected selling Nikkei futures heavily the previous day.”

The Nikkei was up 18.91 points at 9,400.51 by the midday break, after falling as low as 9,326.78. The broader Topix was down 0.4 percent at 820.64.

On Wednesday, the Nikkei fell 1.7 percent as resource-related shares took a hit as investors reined in risk appetite for commodities after China raised interest rates by 25 basis points, its first hike in nearly three years.

On the technical front, the Nikkei has solid support around 9,300, the upper level of its daily Ichimoku cloud.

The dollar rose as far as 81.84 yen from about 81.00 yen, near a fresh 15-year low at 80.84 yen hit the previous session, before Geithner’s comments came out. The greenback was later trading around 81.21 yen.

Market players were awaiting the release of Chinese economic data and the subsequent reaction of Chinese stock and commodity prices for further cues on the direction of trade.

After the morning close in Tokyo, China said its economic growth slowed in the third quarter but was a touch stronger than expected. Consumer inflation hit a 23-month high of 3.6 percent in September but was in line with market expectations.

Shanghai stocks were almost unchanged.

Share of blue-chip exporters gained, with Sony Corp climbing 2.2 percent to 2,733 yen and Kyocera Corp rising 1 percent to 8,440 yen. Toyota Motor Corp added 0.5 percent to 2,903 yen.

NTT Data Corp rose 1.1 percent to 249,700 yen after the Nikkei business daily reported the IT services company will buy U.S. firm Keane Inc for more than 100 billion yen ($1.2 billion) as it looks to make a major push into the world’s biggest IT market.

Commodity-linked stocks regained some ground. Sumitomo Metal Mining gained 0.5 percent to 1,342 yen, while Inpex Corp, Japan’s top oil explorer, rose 0.5 percent to 434,000 yen.

(Editing by Chris Gallagher)

Nikkei gains as dollar rises on Geithner comments