Nikkei up 1.2 percent on Greece hopes; Honda falls

By Elaine Lies

TOKYO (BestGrowthStock) – Japan’s Nikkei average climbed 1.2 percent on Friday, regaining some ground lost in the previous session, as signs that a bailout for debt-ridden Greece could come soon eased fears of wider credit woes.

But Honda Motor Co (7267.T: ) fell after forecasting a smaller-than-expected rise in operating profit, weighing on the broader market.

Market players noted that the “Golden Week” holiday season was limiting activity. Japan’s financial markets were shut on Thursday for a national holiday and will be closed again May 3-5.

“I’d say there’s still concern about Greece, but whether investors pay attention to that as a factor seems to vary day by day,” said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

“Today there’s a bit of reassurance from the yen’s recent weakening, but with U.S. GDP figures later today and the holidays, the market can only rise so far.”

The yen was down 0.1 percent against the dollar at 94.09 yen, and also down 0.1 percent against the euro, at 124.65 yen

The benchmark Nikkei (.N225: ) gained 132.61 points to 11,057.40 after falling 2.6 percent on Wednesday. It marked a 1.3 percent gain on the week, snapping a three-week losing streak. It fell 0.3 percent for the month.

The broader Topix (.TOPX: ) was up 1 percent at 987.04.

Resistance was holding near the Nikkei’s 25-day moving average, which currently comes in around 11,125, while market players said any dips would be stemmed by bargain hunting.

“Players bought back shares as pressing concerns over Greece’s debt woes eased,” said Hajime Nakajima, deputy general manager of the wholesale department at Cosmo Securities.

“But investors remain cautious about chasing prices higher as the Greek credit problem has some way to go before it’s really over.”

Nakajima said bargain-hunting would emerge around 10,800, which is just under the Nikkei’s 38.2 percent retracement of a two-month rally that started in early February and took the Nikkei to an 18-month peak of 11,408.17 in early April.

Though the Nikkei was nearly flat on the month, it ended far off its 18-month high, with market players uncertain about whether it will rise much in May. Longer-term indicators such as MACD remain bearish.

“We have a lot of really key results next month, but the market has already factored in both good earnings for the business year just ended and fairly good forecasts for the current one,” said Kenichi Hirano, operating officer at Tachibana Securities.

“It’ll be hard to push the market much higher without a lot of strong, positive surprises. Much also depends on exchange rates.”

EARNINGS RUSH

Amid a flood of earnings reports, electronics conglomerate NEC Corp (6701.T: ) rose 2.3 percent to 312 yen after it raised its net profit estimate for the past financial year above analysts’ estimates.

Honda Motor slipped 2.1 percent to 3,215 yen after the automaker forecast a smaller-than-expected 10 percent rise in full-year operating profit on Wednesday.

Honda part supplier Showa Corp (7274.T: ) also tumbled, losing 7.8 percent.

After the bell, Fujitsu Ltd (6702.T: ), Japan’s biggest technology services firm, forecast a stronger-than-expected 96 percent rise in profit this year as an economic recovery encourages companies to boost IT spending.

Also after the close, Daiwa Securities Group (8601.T: ), Japan’s second-largest brokerage, reported a surprise loss in January-March, hit by a drop-off in fees to manage share offerings and tax-related charges.

Among exporters helped by the uptick in sentiment about Greece, Canon Inc (7751.T: ) rose 1.9 percent to 4,355 yen and chip-tester maker Advantest Corp (6857.T: ) gained 2.7 percent to 2,451 yen.

Japan Tobacco (2914.T: ) jumped 5.1 percent to 327,000 yen as details about a long-expected price hike emerged.

JR Tokai (Central Japan Railway Company) (9022.T: ) soared 6.7 percent to 767,000 yen after Nomura Securities upgraded the company to “buy” from “neutral” and hiked its target price to 849,000 yen from 685,000 yen, citing an attractive share price and prospects for growth over the next year.

Volume picked up slightly, with 2.2 billion shares changing hands on the Tokyo exchange’s first section. Advancing shares outnumbered declining ones by 2.8 to 1.

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(Additional reporting by Rika Otsuka; Editing by Edwina Gibbs)

Nikkei up 1.2 percent on Greece hopes; Honda falls