Nikkei rises 0.2 percent after Japan data, Toyota higher

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 0.2 percent on Friday, with stronger-than-expected domestic output helping counter investor jitters after weak U.S. data reinforced concerns about a global economic recovery.

Toyota Motor Corp (7203.T: ) climbed 1.8 percent a day after its president testified to U.S. lawmakers, with some investors saying that the stock, which has lost about a fifth of its value over the last month on its recall crisis, now looks undervalued.

The market received support from Japan’s industrial output data, which rose 2.5 percent in January, beating economists’ median estimate for a 1.0 percent rise. Manufacturers ramped up production to meet demand from fast-growing Asia.

“The strong industrial output data was positive for the market. Gains also follow the market’s decline over the past few days, which was probably overdone,” said Soichiro Monji, a chief strategist at Daiwa SB Investments.

“Generally speaking, the economy and corporate earnings are improving and that helps push up stocks. Still, going forward, a lot will depend on other factors such as Greece’s problems.”

In thin trade, the benchmark Nikkei (.N225: ) rose 24.07 points to 10,126.03, after having lost 2.4 percent in the last two days, hurt by the stronger yen and weak data such as a sharp drop in U.S. consumer sentiment.

The index was almost unchanged on the week, while it shed 0.7 percent in the month of February.

The broader Topix (.TOPX: ) gained 0.3 percent to 894.10.

The Nikkei briefly swung into negative territory earlier, but market players said the index is unlikely to fall below 10,000, with investors set to swoop in to bargain hunt at that level.

One analyst said foreigners who had sold on Thursday were short-covering on Friday, boosting the cash market.

The yen held broad gains, partly as persistent worries about sovereign debt problems in Greece kept investors away from riskier currencies. Investors fret about a stronger yen as it eats into exporters’ profits when they are repatriated. (FRX/: )

Wall Street edged lower after U.S. January durable goods orders unexpectedly fell and weekly jobless claims jumped, feeding investor anxiety after poor consumer confidence and new home sales data earlier this week.

Some 1.6 billion shares changed hands on the Tokyo Exchange’s first section, well below the average daily volume last month of roughly 2.6 billion shares, and also below last year’s daily average of 2.3 billion shares. It was the third lowest volume this year.

Advancing stocks outnumbered declining ones, 880 to 624.

TOYOTA HIGHER

Toyota rose to 3,330 yen. Its price-to-book ratio (PBR) is now at about 1, while Honda Motor Co (7267.T: ) has a ratio of around 1.4.

“There appear to be many individual investors who see the current level as good for buying from a long-term perspective, with its PBR around 1 and given its technological strengths, even though uncertainty remains about how the recall problems will ultimately play out,” said an analyst at a domestic brokerage.

The climb comes despite a report in the Nikkei business daily that its North American output in the February-April period will likely fall short of its original target by 20 percent.

Toyota was not alone in its recall woes, with several other carmakers on Thursday announcing recalls, albeit on a much smaller scale.

Nissan Motor Co (7201.T: ) fell 0.4 percent to 705 yen after Japan’s third-biggest automaker said it will recall 76,415 cars across 10 models in Japan and 2,281 cars overseas due to a possible defect that may cause engine failure.

Shares of Aeon Co Ltd (8267.T: ) jumped 2.9 percent to 914 yen after Goldman Sachs upgraded Japan’s second-biggest retailer to “buy” from “neutral”, citing the potential for cost-cutting, the likelihood that consumer spending may start to resume, and low valuations.

Aplus Co (8589.OS: ) soared 31 percent to 93 yen after the consumer credit company said it would seek shareholder approval for a share buyback scheme worth up to 7.2 percent of outstanding common shares and up to about 30 billion yen ($336.6 million) of preferred shares.

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(Editing by Joseph Radford)

Nikkei rises 0.2 percent after Japan data, Toyota higher