Nikkei little changed but supported by weaker yen

* Tokyo stocks move narrowly, eyes on yen, Chinese markets

* Short-term technicals still indicate Nikkei overbought

* Resistance seen at last week’s SQ level of 10,420.74

TOKYO, Dec 13 (BestGrowthStock) – Japan’s Nikkei average traded flat
on Monday after opening slightly higher, with the yen’s recent
weakness providing support but rises limited by short-term
technical indicators showing the market overbought.

Market participants were nervous about taking large positions
ahead of the openings of the Shanghai (.SSEC: ) and Hong Kong
(.HSI: ) markets after China’s central bank move to increase
reserve requirements for banks for the third time in a month.

“The market wants to see moves in Chinese markets, but it
seems like financial markets in general have already factored in
China’s tightening,” said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Morgan Stanley Securities.

“The market is watching whether there will be another
tightening before the end of the year, but for the time being the
Nikkei will be supported by the weaker yen.”

By mid-morning trade the benchmark Nikkei (.N225: ) rose 0.1
percent or 2.93 points to 10,214.88.

The broader Topix index (.TOPX: ) also advanced 0.1 percent to
889.30.

Short-term technical trends signalled that the Nikkei
remained overheated, which inhibited investors form chasing Tokyo
stocks strongly on rallies, analysts said.

The toraku or up-down ratio, which measures how much the
market is overheated, is at 151. A market with a figure above 120
is considered overheated.

The ratio is calculated by dividing the 25-day moving average
of stocks that gained by the 25-day average of those that fell.

The Nikkei reached a fresh seven-month high of 10,373.70 on
Friday, with strong technical resistance seen at 10,420.74 — the
level where futures and options contracts expiring in December
settled on Friday.

Still, the yen’s recent weakness is expected help support
exporters’ shares to give overall support to the Nikkei.

In early Asian trade, the dollar was little changed at 83.95
yen (JPY=: ).

Nikon Corp (7731.T: ) fell 1.8 percent to 1,591 yen, extending
losses after Goldman Sachs cut its rating to “sell” from
“neutral” and added the stock to its “conviction sell” list on
Friday. The brokerage also lowered its target share price to
1,340 yen from 1,450 yen.

Copper smelter Furukawa Co Ltd (5715.T: ) climbed 2 percent to
103 yen after copper prices (CMU3: ) rose near record highs on
bullish Chinese import data and upbeat U.S. consumer sentiment
that boosted the demand outlook. [ID:nN1080251]
(Reporting by Ayai Tomisawa, Antoni Slodkowski and Chikafumi
Hodo; Editing by Michael Watson)

Nikkei little changed but supported by weaker yen