Nikkei to fall after yen advances to 15-year high

TOKYO (BestGrowthStock) – Japan’s Nikkei average is likely to fall on Wednesday with concerns over the yen’s advance to a 15-year high against the dollar seen dousing an upbeat mood that stemmed from last week’s better-than-expected economic indicators.

Nikkei futures traded in Chicago closed at 9,100, down 0.9 percent from the Osaka close, and market players said the benchmark Nikkei (.N225: ) would trade between 8,900 and 9,100.

The Nikkei closed at 9,226.00 on Tuesday, snapping a four-day rising streak spurred by data including stronger-than-expected U.S. jobs figures.

“The Nikkei is likely to extend losses today after U.S. stocks (Read more about the stock market today. ) suffered losses. The benchmark could go below 9,100,” said Toshiyuki Kanayama, a market analyst at Monex Inc.

“The main impetus for today will come from the currencies and whether the yen will keep advancing or not after going below 84 yen. Concerns toward a strong yen are deep-rooted and investors may not feel bold enough to hunt for bargains today.”

The yen’s surge is expected to cut short the Nikkei’s stay above its 25-day moving average, currently at around 9,210. The benchmark this week had risen above the 25-day moving average for the first time in nearly a month.

The 25-day moving average is considered a proxy for a one-month moving average and is closely watched in Japan.

After the 25-day moving average, the Nikkei’s next downward target is seen at 9,126, around its five-day moving average, and then at 9,053, its “tenkan sen” on daily Ichimoku charts, an indicator of short-term trends. Ichimoku charts are popular with Japanese traders.

It marked a 16-month closing low of 8,824.06 last week.

The dollar traded at 83.79 yen, within sight of a 15-year low of 83.51 yen hit on electronic trading platform EBS on Tuesday. (FRX/: )

U.S. stocks (Read more about the stock market today. ) fell in very light volume on Tuesday, with the Dow shedding 1 percent, as investors seized on renewed concerns about European banks as a reason to sell shares after strong gains last week. (.N: )

STOCKS TO WATCH

— UniCharm Corp (8113.T: )

UniCharm, a maker of disposable diapers, said on Tuesday it would raise up to 80.5 billion yen ($956.9 million) by issuing euroyen convertible bonds due in 2013 and 2015.

— Toyota Motor Corp (7203.T: )

Toyota plans to begin producing a hybrid version of the Yaris subcompact at its factory in France in the business year starting next April, the Mid-Japan Economist newspaper said.

— Steelmakers

Anglo-Australian mining giant Rio Tinto (RIO.L: ) has agreed with major Japanese steelmakers to reduce its iron ore price for October-December by roughly 13 percent from the previous quarter, the Nikkei business daily reported.

(Reporting by Shinichi Saoshiro; Editing by Edwina Gibbs and Edmund Klamann)

Nikkei to fall after yen advances to 15-year high