TOKYO (Thomson Financial) - Japanese shares finished Monday morning higher
after the yen weakened against the dollar and worries over the health of the US
economy eased.
"Since there are no big events this week (such as last week's FOMC), we are
now in a phase where the market will test how far stocks can bounce, " said
Yoshikiyo Shimamine, chief economist at Dai-Ichi Life Research Institute.
"But because long-term interest rates (which could indicate the outlook for
the economy's fundamental conditions) remain weak, you cannot expect a big
rebound. The upside mayb be capped at say, 12,750 for the Nikkei," Shimamine
said.
The benchmark Nikkei 225 returned to the 12,500-point level for the first
time since March 14. In the previous three sessions, the index regained nearly
700 points.
Initially, the Nikkei 225 traded lower as investors locked in profits
following a weak reading on business sentiment.
Before the opening bell, the government announced that sentiment among large
Japanese companies deteriorated for the second straight quarter in the first
quarter, reflecting growing
concern about profits amid higher procurement costs and increased uncertainty
about demand at home and abroad.
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.
The blue-chip Nikkei 225 Stock Index ended the morning session up 46.33
points or 0.4 percent at 12,528.90, off a high of 12,577.97.
The broader Topix index rose 8.42 points or 0.7 percent to 1,228.46, after
rising to as high as 1,232.75.
Gainers outpaced decliners 1,120 to 479, with 112 issues unchanged.
Volume declined to 713 million shares from 796 million on Friday morning.
Stocks were up in a broad-based rebound, with auto, paper and pulp, steel,
non-bank financial issues higher.
Toyota Motor rose 110 yen or 2.1 percent to 5,330 as investors welcomed
report from the Nikkei newspaper at the weekend that Japan's largest automaker
is planning to build its fifth engine factory in the country around the year
2010 at a cost of about 20-30 billion yen.
Other automakers were firmer, with Nissan Motor up 33 yen or 3.8 percent at
892 and Honda Motor up 60 yen or 2.1 percent at 2,935.
Paper and steel issues were picked up by investors looking for stocks that
will benefit from the yen's appreciation.
Oji Paper rose 17 yen or 3.8 percent to 463, while Nippon Paper was up 6,000
yen or 2.4 percent at 252,000. Nippon Steel gained 10 yen or 2.1 percent at 483,
Sumitomo Metal Industries advanced 14 yen or 3.7 percent to 391 and JFE Holdings
climbed 170 yen or 3.8 percent to 4,660.
General leasing firm Orix rallied 760 yen or 5.5 percent to 14,650 and
consumer loan company Takefuji gained 50 yen or 2.1 percent at 2,395.
Hitachi lost 3 yen or 0.5 percent at 615 after the Nikkei newspaper 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 edged up 1,000 yen or 0.6 percent to 169,000 after the
Nikkei reported that the banking group has decided to sell its headquarters
building Tokyo's Otemachi district to Mitsubishi Estate Co for just over 150
billion yen.
(1 US dollar = 99.81 yen)
masami.hachisu@thomson.com
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