Nikkei set to advance on strong U.S. shares, weaker yen

TOKYO (Reuters) – Japan’s Nikkei average is expected to advance on Monday as firmness in U.S. shares after strong jobs data and a weaker yen could encourage solid buying, but rises could be limited by views that recent recoveries may be too rapid.

The Nikkei may rise beyond 9,822.06 hit on Friday, the highest level since a post-quake panic sell-off on March 14, although traders want to see the Bank of Japan’s re-issued tankan survey of corporate sentiment at 8:50 a.m. (2350 GMT Sunday) showing results collected after the March 11 quake.

“Strong economic signals in the United States and a weaker yen should encourage buying of Japanese shares,” said Hiroichi Nishi, general manager at SMBC Nikko Securities’ equity marketing section.

“But the market is concerned about the speed of the rise in prices. Also the problem of the Fukushima nuclear power plant, unrest in the Middle East and high oil prices are concerns, which could slow gains in prices.”

On Friday, the Dow Jones industrial average (.DJI: Quote, Profile, Research) hit 12,419.71 — its highest intraday level going back to June 2008 — before closing up 56.99 points or 0.46 percent at 12,376.72 after solid jobs figures. (.N: Quote, Profile, Research)

U.S. employment grew solidly for a second month in March and the jobless rate hit a two-year low of 8.8 percent.

“The market is still careful about buying Japanese stocks aggressively in the medium to longer term, but further advance in U.S. shares and more strong signals in the U.S. economy could take the Nikkei beyond 10,000,” said a trader a Japanese brokerage house.

The Nikkei (.N225: Quote, Profile, Research) is expected to trade between 9,700 and 9,900 on Monday after ending down 0.5 percent at 9,708.39 on Friday.

Nikkei futures on Chicago rose to 9,825 from the Osaka close of 9,700.

Besides the tankan, another market focus the Bank of Japan’s monetary policy meeting on April 6-7.

STOCKS TO WATCH

— Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research)

Mitsubishi UFJ Securities Holding is considering selling off its stake in major Singaporean brokerage Kim Eng Holdings Ltd to cover a large trading loss at a subsidiary, the Nikkei daily said on Saturday.

Mitsubishi UFJ Financial Group plans to sell its roughly 30 percent interest in Kim Eng to Malayan Banking Berhad, the leading Malaysian financial services group known as Maybank, the paper said.

— Fast Retailing (9983.T: Quote, Profile, Research)

Fast Retailing said existing store sales at its Uniqlo clothing chain declined 10.5 percent in March after Japan’s earthquake and tsunami kept customers away and damaged stores.

It closed 160 stores after the disaster and 14 were still shuttered at the end of March, it said in a statement.

(Reporting by Chikafumi Hodo; Editing by Michael Watson)

Nikkei set to advance on strong U.S. shares, weaker yen