Nikkei hits 18-mth peak after solid US jobs data

* Nikkei rises above 38.2 pct retracement of 2007-08 sell-off

* Resistance seen at 11,600 based on past trade -analyst

* Yen’s dip after the jobs data helps

* Fast Retailing slides after March sales drop

* Softbank falls after reports phone limits may be lifted

By Masayuki Kitano

TOKYO, April 5 (BestGrowthStock) – Japan’s Nikkei average hit a fresh
18-month high on Monday after U.S. employers created jobs in
March at the fastest rate in three years, the strongest signal
yet that the U.S. recovery is on a solid footing.

Helped by the yen’s post-jobs data dip to a seven-month low
against the dollar, the Nikkei pushed above a 38.2 percent
retracement of its slide from a 2007 peak to its 2008 trough, and
hit a fresh 18-month high for the fifth straight session.

But popular stock Fast Retailing (9983.T: ) slid 9.2 percent
after the company said its Uniqlo casual-clothing chain’s
same-store sales slid 16.4 percent in March from a year earlier,
hit by unseasonably cold weather.

Technical indicators such as MACD as well as daily and weekly
Ichimoku charts show the Nikkei is in an uptrend. The Nikkei’s
relative strength index (RSI), however, has risen to above 70,
and has entered levels at which the market is considered
overbought.

But Nagayuki Yamagishi, investment strategist at Mitsubishi
UFJ Securities, played down worries that the Nikkei’s rally was
looking overstretched.

“As long as it rises along with gains in the five-day moving
average, an extreme sense of overheating is unlikely to emerge,”
said Yamagishi. The Nikkei has mostly moved above its five-day
moving average since early March.

U.S. nonfarm payrolls rose 162,000 in March, the largest
since March 2007, and only the third time payrolls have increased
since the recession struck in late 2007.

The Nikkei (.N225: ) rose 0.5 percent to 11,343.28.

It climbed as high as 11,408.17, its highest since October
2008 and above 11,313.6, the 38.2 percent retracement of its 2007
to 2008 slide, for a second straight session.

The broader Topix index (.TOPX: ) rose 0.6 percent to 995.34.

Yamagishi said the Nikkei may face resistance at 11,600,
adding that trade just above that level has been relatively
sparse in recent years.

If that level is breached, however, the Nikkei could set its
sights on 12,000, Yamagishi said.

In terms of retracement levels, the next major level is the
50 percent retracement of the 2007 to 2008 sell-off near 12,650.

Sharp Corp (6753.T: ) rose 3.1 percent to 1,246 yen. It plans
to start making advanced 3D displays this year that require no
special glasses for cellphones and other mobile devices, betting
demand for 3D images will grow beyond movie theatres and living
rooms to portable machines. [ID:nTOE630063]

The Nikkei business daily also reported on Monday that Sharp
plans to diversify into the electronic signboard business by
offering 52- and 60-inch LCD panels that can be assembled into
large displays at low cost.

Fast Retailing (9983.T: ) tumbled 9.2 percent to 15,150 yen and
was the biggest percentage decliner on the Nikkei 225.

The slide in March sales snapped a trend of generally robust
growth since 2008 on the back of hit products like its “Heattech”
line of basic garments made of heat-retaining fabric.

Softbank shares fell 3.5 percent, the second-biggest
percentage loser among Nikkei 225 stocks, to 2,256 yen on news
that Japan’s government planned to make it easier for mobile
phone users to switch operators while keeping the same phone.
[ID:nTOE63401G]

The move is a risk for Softbank Corp (9984.T: ) due to its weak
network and it’s status as sole provider of iPhone and could
prompt customers to switch to NTT DoCoMo, which has a strong
network.

NTT DoCoMo (9437.T: ) shares gained 0.6 percent to 144,000 yen.

Investment Analysis

(Editing by Edwina Gibbs)

Nikkei hits 18-mth peak after solid US jobs data