Nikkei seen higher on upbeat U.S. data, technicals

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to gain on Monday after more upbeat data helped sooth investor worry that the U.S. economic growth would slow, with technical charts also pointing to further gains for the index.

A decision by global regulators and central bankers that banks will have to triple to 7 percent the amount of top quality capital, will likely have a limited impact on Japanese banks, market analysts said.

The decision was in line with expectations and banks are given enough time — implementation of the new Tier 1 rules will be fully implemented by January 2015, they said.

“The market will likely rise after extreme pessimism about the U.S. economy eased and U.S. stocks (Read more about the stock market today. ) gained, and as the yen’s rapid advance seems to be halting,” said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

Moves in Chinese stocks are also in focus after data at the weekend showed an uptick in inflation to 3.5 percent in the year to August from 3.3 percent in July, market players said, though the figure was in line with expectations.

“After Japanese stocks have a higher start, they are likely to be range-bound, with eyes on Chinese stocks after the 3.5 percent CPI figure as well as moves in the currency market,” Nishi said.

Nikkei futures traded in Chicago closed at 9,290, up 1.2 percent from the Osaka close.

The benchmark Nikkei (.N225: ) is likely to move between 9,200 and 9,400, market players said. It rose 1.6 percent on Friday to 9,239.17, pulling away from a 16-month low of 8,796.45 hit on September 1. The Nikkei gained 1.4 percent on the week.

In an encouraging technical sign for the Nikkei, its 5-day moving average edged above its 25-day moving average, forming a

“Golden Cross” that can often indicate further rises and is regarded as a buying signal.

U.S. stocks (Read more about the stock market today. ) inched up on Friday, with the Dow and S&P 500 closing the week with their seventh gain in eight sessions as the gradual improvement in economic data continued as U.S. wholesale inventories surged by the largest amount in two years in July.

STOCKS TO WATCH

— Komatsu Ltd (6301.T: )

Komatsu plans to begin output of large dump trucks in Russia in business year 2011, the first foreign firm to do so, the Nikkei business daily said on Sunday.

— Tokyo Electric Power Co (TEPCO) (9501.T: )

TEPCO said it will pump in another 130.4 billion yen ($1.6 billion) into Japan Nuclear Fuel Ltd to help the company start operations at its problematic nuclear reprocessing plant, the Nikkei business daily reported.

— KDDI Corp (9433.T: )

KDDI, Japan’s No. 2 cellphone operator, on Friday named senior vice president Takashi Tanaka, who had headed its corporate services and WiMax businesses, as its next president in a bid to revive its flagging operations.

(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

Nikkei seen higher on upbeat U.S. data, technicals