Nikkei set to jump on US data; euro concerns ease

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to jump on Friday to test its highest in about six months after a stream of positive U.S. retail and housing data and the easing of concerns over the euro zone debt crisis boosted Wall Street indexes.

Data showed U.S. retailers reported higher-than-forecast sales for November, while the four-week moving average for initial weekly claims for jobless benefits fell to a fresh two-year low, though new requests rose for the week.

Benchmark Nikkei futures in Chicago closed at 10,320.00, 1.6 percent above the Osaka close.

“Worries about the global economy are receding, and gradually rising technical levels are also supporting sentiment,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.

But he said that profit-taking may kick in during the afternoon as investors await the outcome of U.S. jobs data released later in the day.

The benchmark Nikkei is expected to move in a range of 10,150 to 10,300, traders said. It rose almost 2 percent to close at its highest since June 21 on Thursday, encouraged by strong U.S. economic data, a softer yen and hopes of steps in Europe to ease the sovereign debt crisis.

The Nikkei would mark its highest since May if it rises above its June 21 intraday high of 10,251.90.

A report by the U.S. National Association of Realtors said on Wednesday that home sales in October jumped 10.4 percent, against economists’ forecast for a 0.5 percent decline, hinting the economic recovery had started to stabilize.

Tokyo investors are gearing up for Friday’s U.S. employment report for November.

The U.S. government’s monthly employment report on Friday is forecast to show another month of job gains in both the private and public sectors. In a Reuters poll, nonfarm payrolls are seen up 140,000 in November, while private payrolls are seen up 153,000..

Even with improving labor market conditions, however, the unemployment rate was expected to remain at a lofty 9.6 percent for a fourth straight month.

The European Central Bank allayed some concerns of a growing euro zone crisis with hefty purchases of Portuguese and Irish debt. Although the ECB said it did not plan to increase the size of its liquidity program at this time.

STOCKS TO WATCH

–Canon Inc

Canon is set to build a factory in southern Japan at a cost of 30 billion yen to make parts for laser printer cartridges, the company said on Thursday.

–Fast Retailing

Fast Retailing said on Thursday sales at the Japan outlets of its Uniqlo casual-clothing chain tumbled 14.5 percent year-on-year in November as it failed to clear high sales levels set a year ago.

–NTT DoCoMo Inc, Softbank Corp, KDDI Corp

NTT DoCoMo, Softbank, KDDI and three other firms are in the fray to provide a new broadcasting service for portable digital devices, the Nikkei business daily said on Friday.

(Reporting by Antoni Slodkowski and Ayai Tomisawa; Editing by Joseph Radford)

Nikkei set to jump on US data; euro concerns ease