Nikkei may break 9,405 after weak U.S. jobs data

TOKYO, June 6 (Reuters) – The Nikkei benchmark is set to
fall on Monday after soft U.S. jobs data added to evidence that
the world’s biggest economy was slowing, but losses may be
limited as valuations for Japanese stocks are now seen as
attractive.
Some market participants think the benchmark could break
below recent strong support of 9,405, an intraday low marked on
April 19.
The U.S. government’s payrolls report showed 54,000 jobs
added in May, the weakest reading since September, while the
U.S. unemployment rate rose to 9.1 percent from 9 percent in
April. For details, see [ID:nOAT004818]
But analysts noted that more than sixty percent of stocks
listed on the Tokyo stock exchange’s mainboard are trading at or
below their book value.
“What other major global stock markets are undervalued to
this extent?” said Kenichi Hirano, a strategist at Tachibana
Securities. “The U.S. market may have entered a correction
phase, but the Tokyo market may not follow suit.”
In the United States, major indexes are trading at their
lowest in six weeks, and the S&P is off 4.7 percent from highs
reached in late April.
Shares on the Tokyo Stock Exchange’s main board are trading
at around book value, while stocks in the S&P 500 trade
at about 2.1 times their book value, according to Thomson
Reuters Starmine.
Nikkei futures in Chicago <2NKc1> ended at 9,455 Friday,
down from their Osaka close of 9,520.
The Nikkei fell 0.7 percent to 9,492.21 on Friday,
while the broader Topix fell 1.1 percent to 816.57.
Analysts said that the Nikkei is expected to trade between
9,350-9,500 on Monday.

———————-MARKET SNAPSHOT @ 2305 GMT ————
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 1300.16 -0.97% -12.780
USD/JPY 80.24 0.04% 0.030
10-YR US TSY YLD 2.9914 — 0.000
SPOT GOLD 1541.7 -0.01% -0.100
US CRUDE 100.45 0.23% 0.230
DOW JONES 12151.26 -0.79% -97.29
————————————————————-

> Wall St skids to 5th week of losses, hope endures
> Dollar skids on dour US jobs data; more losses seen
> After post-payroll rally, focus shifts to auctions
> Gold gains on soft US jobs data, falling dollar
> Brent edges up as weak dollar offsets jobs data
STOCKS TO WATCH
— Toyota Motor Corp
The president of Toyota said on Saturday he expects the
automaker to resume full production globally in November and its
Japanese output is expected this month to recover to 90 percent
of levels seen before a March earthquake. [ID:nL3E7H403X]
— Hitachi Ltd
Hitachi’s operating profit is expected to fall for the
first time in three years this fiscal year as a slowdown in
domestic auto production hits related businesses in the
April-September half, the Nikkei business daily reported.
— Daiichi Sankyo
Advanced melanoma patients treated with an experimental pill
developed by Roche and Daiichi Sankyo were 63
percent less likely to die than patients given chemotherapy,
according to a new trial. [ID:nN01212836]
— Nomura Holdings
Nomura slashed cash bonuses it paid to its directors and
executives by 95 percent in the year that ended March 31, a
disclosure made to shareholders showed, as Japan’s biggest
brokerage failed to deliver an improvement in earnings that
would vindicate its overseas expansion.