Nikkei rises 0.6 pct as yen helps, earnings in focus

* Nikkei cuts two days of losses but gains seen limited

* Stable dlr/yen helps, but Fed Nov meeting awaited-analyst

* Tech firms’ earnings begin this week, profit seen patchy

By Aiko Hayashi

TOKYO, Oct 27 (BestGrowthStock) – Japan’s Nikkei average rose 0.6
percent on Wednesday after two days of losses, helped by
short-covering on a halt in the yen’s advance against the dollar,
with solid earnings reported so far helping boost investor
confidence.

But analysts expect gains to be kept in check as the market
heads into the peak of the earnings season, with Canon Inc
(7751.T: ) set to open the technology sector’s reporting later in
the day.

“Short-covering of stocks emerged on stabilising currency
moves, which was helped by views that the Federal Reserve’s
expected easing may not be as big as has been expected due to
factors such as solid U.S. earnings,” said Fumiyuki Nakanishi, a
manager at SMBC Friend Securities.

“Still, the market is unlikely to find a clear direction
until the Fed’s Nov.2-3 meeting. Dealers are also finding it hard
to actively take positions eyeing the month-end, as are
institutional investors, because we’re in the midst of the
earnings season.”

The benchmark Nikkei (.N225: ) rose 54.94 points to 9,432.32,
after having slipped 0.5 percent this week, while the broader
Topix (.TOPX: ) added 0.4 percent to 820.89.

Japanese stocks have faced pressure from the yen, which
firmed to a fresh 15-year peak of 80.41 (JPY=: ) against the dollar
on Monday, approaching a record high of 79.75 yen. In early Asia
trade, the yen changed hands at 81.45 yen.

The Nikkei’s support likely stands at last week’s intraday
lows around 9,310-9,320, with the upper level of its daily
Ichimoku cloud near 9,300 also seen as key technical support.

Some technical resistance is seen at the 25-day average, now
at 9,490.

Japan’s electronics firms are expected to show a patchy
recovery for July-September from last year’s weak results, but
even strong performers will likely leave their full-year
forecasts unchanged as concerns mount over the strong yen and
disappointing demand for TVs.

Canon, set to report results after the market close, is
expected to show a nearly 50 percent jump in operating profit
year-on-year to 89.5 billion yen, on healthy camera sales and
cost-cutting.
For a PREVIEW of electronics firms’ earnings see [ID:nTOE69L022]

The stock was down 1.5 percent at 3,650 yen.

But shares of other companies that had upbeat earnings
prospects found favour.

Sumitomo Heavy Industries Ltd (6302.T: ) shot up 5.4 percent to
467 yen after the major shipbuilder more than doubled its
half-year net profit estimate thanks to bigger excavator sales
and cost-cutting measures.

The company now projects a group net profit of 8 billion yen
($98.26 million) for the six months to Sept. 30 instead of a
previously projected profit of 3 billion yen.

Shares of Mitsubishi Corp (8058.T: ) gained 1.3 percent to
1,998 yen after the Nikkei business daily said the trading firm’s
net profit likely jumped 89 percent on the year to around 260
billion yen in the April-September first half, thanks to strength
in energy and mineral operations.

Exporters rose, with TDK Corp (6762.T: ) up 1.7 percent at
4,675 yen and Tokyo Electron Ltd (8035.T: ) rising 1.1 percent to
4,825 yen. Honda Motor Co (7267.T: ) climbed 1.5 percent to 2,948
yen.
(Editing by Michael Watson)

Nikkei rises 0.6 pct as yen helps, earnings in focus