Nikkei up 0.1 percent; techs rise on yen, earnings hopes

By Masayuki Kitano

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 0.1 percent Thursday, with tech shares such as Advantest Corp supported by hopes for strong earnings and by the yen’s dip to a two-month low against the dollar the previous day.

But Obayashi Corp slid 1.3 percent in heavy volume after the construction company said it was likely to post an operating loss of 66 billion yen ($716.6 million) for this financial year due to increased costs related to its Dubai metro project.

Additional downward pressure came from commodities shares after the price of oil and industrial metals slid Wednesday, but this was countered by gains in semiconductor-linked stocks on expectations for strong results and improved demand.

“The type of shares that are being bought are ones such as high-tech shares that have global operations and can be expected to achieve good revenues,” said Hajime Nakajima, deputy general manager for Cosmo Securities’ equity department.

Some high-dividend shares in sectors such as electric power, chemicals and pharmaceuticals attracted buying, he added.

The benchmark Nikkei rose 13.82 points to 10,828.85. The Nikkei hit a two-month intraday high of 10,880.62 Wednesday.

The broader Topix eked out a slim gain, inching up 0.16 point or 0.02 percent to 952.13.

Trading volume was moderate, with some 1.9 billion shares changing hands on the Tokyo exchange’s first section, and below the 2.0 billion share threshold that market players consider a sign of active trade.

Declining shares outnumbered advancing ones by 896 to 643.

“The Nikkei is trying to renew the year’s high just under 11,000, but a lack of strong buying impetus as the end of the current business year approaches is likely to weigh on the market,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Toray Industries Inc, a major synthetic fiber maker, surged 3.1 percent to 530 yen in active trade after the Nikkei business daily said the company has decided to raise carbon fiber prices by some 10 percent to 15 percent, effective from April shipments, in what would be its first price increase in 20 months.

Carbon fiber is used in aircraft and sporting goods, and with airplane makers recovering and demand for sports equipment having bottomed out, Toray sees this as a good time to raise prices and help offset the rising cost of ingredients, the Nikkei said.

Trading volume in Toray climbed to roughly three times its 30-day moving average, as did trade in major airline All Nippon Airways Co Ltd, which slid 3 percent to 262 yen after Goldman Sachs downgraded the stock to “sell” and added it to its “conviction sell” list.

Goldman Sachs set a new target price of 220 yen for ANA, citing downside risk to earnings guidance and adding that the shares look overvalued relative to its Japanese transportation peers.

Obayashi Corp fell 1.3 percent to 396 yen and its trading volume jumped to more than six times its 30-day moving average.

Chip-tester maker Advantest Corp rose 2.7 percent to 2,260 yen, and other semiconductor-linked shares also climbed, with Shin-Etsu Chemical, a major maker of semiconductor wafers, rising 2.5 percent to 5,320 yen and memory maker Tokyo Electron gaining 1.7 percent to 6,040 yen.

The dollar dipped 0.3 percent to 92.06 yen. Wednesday the greenback hit its highest in more than two months at about 92.40 yen.

The dollar rose broadly Wednesday after Portugal’s rating was lowered one notch by Fitch to AA-minus, compounding problems in the euro zone, where diplomats have still not agreed on a safety net for heavily indebted Greece.

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(Additional reporting by Elaine Lies; Editing by Joseph Radford)

Nikkei up 0.1 percent; techs rise on yen, earnings hopes