TOKYO (Thomson Financial) - Japanese shares edged higher in volatile early
trading Monday on the stability of the yen and the easing of concerns about the
US economy.
"While weak business sentiment dampened the market, investors were relieved
that concern [about the US economy] is less pessimistic than before," said
Hiroichi Nishi, equity chief at Nikko Cordial Securities.
Initially, the benchmark Nikkei 225 Stock Average opened lower as investors
locked in profits from recent gains after a weak reading on business sentiment.
The business sentiment diffusion index for large Japanese companies dropped
to minus 9.3 in the first quarter from plus 0.5 in the previous quarter,
reflecting growing concern about profits, the government said before the opening
bell.
The Nikkei gained nearly 700 points over the previous three sessions.
At 9.55 am (0055 GMT), the blue chip Nikkei was up 16.78 points or 0.1
percent at 12,499.35. The broader Topix rose 5.75 points or 0.5 percent to
1,225.79.
But lingering uncertainty is expected to keep a lid on the upside.
"The Japanese market will remain extremely top heavy, given uncertainties
about the US economy and the global markets," said Mizuho Research Institute
analyst Koji Takeuchi.
Toyota Motor gained 130 yen or 2.5 percent at 5,350 as investors took
comfort from a weekend report in the Nikkei newspaper that Japan's largest
automaker is planning to build its fifth engine factory in the country in around
2010 at a cost of about 20-30 billion yen.
Hitachi was down 7 yen or 1.1 percent at 611 after the Nikkei reported that
the electronics giant is planning to resume production of automobile
turbochargers by 2010 as it seeks to boost the sales of its automotive parts
business
Resona Holdings gained 1,000 yen or 0.6 percent at 169,000 after the Nikkei
reported that the banking group has decided to sell its headquarters building
Tokyo to Mitsubishi Estate for 962 million shares.
(1 US dollar = 99.79 yen)
masami.hachisu@thomson.com
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