Nikkei up 1.6 pct, buoyed by futures buying, data

* Buying of futures likely helped Nikkei – analysts

* Nikkei moves further away from 16-month lows

* Some wariness as China moves data release forward

By Aiko Hayashi and Shinichi Saoshiro

TOKYO, Sept 10 (BestGrowthStock) – Japan’s Nikkei average rose 1.6
percent on Friday, helped by what some market players said was
buying of futures and a slight softening of the yen against the
dollar.

Stronger-than-expected U.S. data on jobless benefits and
trade added to investor confidence, market players said, with
blue-chip exporters leading the market’s advance.

But the benchmark trimmed some gains towards the day’s end as
Chinese shares sagged and caution prevailed ahead of banking
regulation changes to be made over the weekend.

“Upbeat data and the yen lifted stocks early on. But a dip in
China stocks and wariness towards the weekend’s events slowed the
rise in the afternoon ,” said Yumi Nishimura, deputy general
manager at Daiwa Securities Capital Markets.

“There is some caution as China decided to release data over
the weekend instead of next week. Participants also want to see
how the new banking regulations are finalised.”

Beijing moved the release of key economic data for August to
Saturday from Monday, prompting speculation the numbers could
trigger a reaction on financial markets.

Central bank and regulatory officials agreed tougher new
global bank capital rules on Tuesday and have kept investors on
tenterhooks until Sunday when their formal endorsement is
expected. [ID:nLDE686222]

The benchmark Nikkei (.N225: ) ended the day 140.78 points
higher at 9,239.17, pulling away from a 16-month low of 8,796.45
hit on Sept. 1. The benchmark gained 1.4 percent on the week.

The broader Topix (.TOPX: ) gained 0.8 percent to 833.72.

Estimates by local brokerages just after the open showed
Nikkei futures and options contracts expiring in September likely
settled at 9,150.32. The Osaka Securities Exchange later
confirmed the figure. [ID:nTKW007104]

“The special quotation every three months is a chance for
participants to take on fresh positions,” said Shoji Yoshigoe, a
senior investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.

“There appears to be more buyers of futures this time around
ahead of the ruling party vote next week. The buyers seem to be
preparing for a possible Ozawa win. The outcome is very difficult
to predict, but it would be too late to start buying futures
after the vote.”

A win by ruling Democratic Party powerbroker Ichiro Ozawa,
who is challenging Prime Minister Naoto Kan in a Party leadership
vote on Sept. 14, would likely give a short-term boost to stocks
while weakening Japanese government bonds and the yen, a Reuters
poll showed on Friday. [ID:nTWKAKE617]

Analysts say Ozawa appears likely to spend more heavily on
economic stimulus.

The dollar changed hands at 83.92 yen (JPY=: ), compared with
the 15-year low of 83.34 yen hit this week. [FRX/]

On the charts, the Nikkei faces resistance at 9,410, around
its 13-week moving average, which has served as solid resistance
since late August. After that, the bottom of the Nikkei’s
Ichimoku cloud lies around 9,530. Ichimoku charts are popular
with Japanese traders.

CANON JUMPS

Camera maker Canon Inc (7751.T: ) climbed 5.6 percent to 3,750
yen after the company said on Thursday it would spend as much as
50 billion yen ($596.2 million) to buy back up to 1.2 percent of
its shares outstanding between Sept. 10 and Nov. 12 to improve
its capital efficiency.

Nonferrous smelters gained on the back of the recent surge in
prices of nonferrous metals. Copper (CMU3: ) and zinc (CMZN3: ) for
three-month delivery on the London Metal Exchange have hit
four-months high over the past week on improved global demand
prospects.

Sumitomo Metal Mining (5713.T: ) rose 1.1 percent to 1,207 yen
and Mitsui Mining and Smelting (5706.T: ) gained 1.7 percent to 241
yen.

The market took in stride news that the Incubator Bank of
Japan, an unlisted lender specialising in small business loans,
was set to file for bankruptcy protection on Friday.
[ID:nTOE688090]

Market players said they saw little impact on the overall
market, citing the special nature of its business, while the Bank
of Japan said it expected no adverse impact on the country’s
banking system from the small lender’s failure.

Some 2.19 billion shares changed hands on the Tokyo
exchange’s first section, its highest volume since late July,
boosted by trade related to the settlement of futures and
options.

Advancing stocks outnumbered declining ones by more than 2 to
1.
($1=83.86 Yen)
(Editing by Michael Watson)

Nikkei up 1.6 pct, buoyed by futures buying, data