Nikkei up but gains capped by yen; Nidec jumps

* Short-covering boosts Nikkei but yen limits gains

* Market awaits Kan-Shirakawa meeting, hopes for policy

* Nidec jumps after saying will buy Emerson unit

By Elaine Lies

TOKYO, Aug 18 (BestGrowthStock) – Japan’s Nikkei average rose 0.5
percent on Wednesday, buoyed by short-covering after two days of
falls this week, though rises were expected to be limited by the
yen’s persistent strength against the dollar.

Nidec Corp (6594.OS: ), a precision motor manufacturer, jumped
more than 4 percent after the firm said it would purchase the
motors business of U.S. firm Emerson Electric Co (EMR.N: ).
[ID:nTOE67G083]

Analysts said the Nikkei could be due for a short-term
rebound but that it was still too early to say it had begun,
adding that the results of a meeting between Prime Minister Naoto
Kan and Bank of Japan Governor Masaaki Shirakawa expected next
week could be key in determining longer-term direction.

A government source said on Tuesday that the meeting is
expected next Monday. [ID:nTOE67G02K]

“The market is supported for now on expectations — hope for
the Kan-Shirakawa meeting, and hope that the government will do
something to rein in the yen or provide economic stimulus,” said
Noritsugu Hirakawa, a strategist at Okasan Securities.

“But it’s too early to say that what we’re seeing now is a
rebound, especially with the dollar stuck below 86 yen. Mainly
it’s just a bit of short-covering.”

The government will start to debate stimulus steps on Friday,
Economics Minister Satoshi Arai was quoted as saying by Jiji news
agency on Tuesday. But the additional stimulus is expected to be
relatively modest and is likely to involve reallocating funds
rather than new spending.

The dollar had edged down against the yen to 85.39 yen (JPY: )
by midmorning.

The benchmark Nikkei (.N225: ) gained 30.66 points to 9,192.34
after closing at its lowest in more than eight months on Tuesday.
The broader Topix (.TOPX: ) rose 0.4 percent to 830.45.

Whether the Nikkei can stay above 9,000 or not is a big focus
this week, market players say, though downside tries have been
checked just under 9,100 several times over the last week.

Below 9,000, the Nikkei’s next support lies at 8,697, a 61.8
percent retracement of the rally between the March 2009 low and
the April 2010 high.

Charts show the Nikkei moving away from oversold territory
but with little in the way of buy signals, suggesting sideways
moves for some time.

Wall Street rose after earnings from Wal-Mart Stores Inc
(WMT.N: ), the world’s largest retailer, and Home Depot Inc (HD.N: )
beat analyst forecasts. [ID:nN17234410] [ID:nN17114618]

U.S. data released on Tuesday was mixed, with producer prices
rising in July for the first time in several months and
industrial production expanding at twice the expected pace,
boosting the dollar slightly, though housing starts posted a
weaker-than-expected rise. [ID:nN17118370] [ID:nN17175177]

NIDEC GAINS

Nidec Corp rose 4.3 percent to 7,460 yen after saying on
Wednesday that it would buy the motors and controls business of
U.S. firm Emerson Electric Co (EMR.N: ), in a move the Nikkei
business daily said could be worth as much as $820 million.

The deal marks the latest move in Nidec’s aggressive
expansion through acquisitions, and comes as the rising yen
reignites a push by Japanese companies to snap up overseas assets
and secure growth outside their sluggish home market.
[ID:nTOE679050]

Exporters gained as well, with Honda Motor Co (7267.T: ) rising
1.6 percent to 2,805 yen and Canon Inc (7751.T: ) up 1.1 percent to
3,585 yen. Kyocera Corp (6971.T: ) climbed 0.5 percent to 7,630
yen.

Commodities-linked firms gained as well after metals prices
climbed on Tuesday, with copper rising to a one-week high on
Tuesday and other metals, such as nickel, also posting strong
gains. [ID:nnLDE67G0VF]

Mitsubishi Corp (8058.T: ), Japan’s largest trading house, rose
1.7 percent to 1,873 yen and fellow trader Mitsui & Co (8031.T: )
gained 2 percent to 1,188.
(Reporting by Elaine Lies; Editing by Chris Gallagher)

Nikkei up but gains capped by yen; Nidec jumps