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Nikkei adds 1.13 pct as weak yen, positive earnings spur buying

English.news.cn   2014-07-25 20:46:55

TOKYO, July 25 (Xinhua) -- The Nikkei stock index bounced back Friday adding 1.13 percent to hit a six-month closing high as the yen's retreat versus the U.S. dollar spurred buying, aided by some upbeat domestic corporate earnings results that lifted the market mood.

The benchmark Nikkei 225 index added 173.45 points to close at 15,457.87, its highest level since late January, while the broader Topix index of all first-section issues rose 0.90 percent, or 11. 49 points, to finish the week at 1,281.35.

A solid performance on Wall Street and the S&P index's record closing high, ensured that stocks drew buying from the get go here, supported in addition by the dollar's firmness against the yen.

A report realized before the bell showing that June inflation eased slightly to 3.3 percent in Japan had little bearing on stocks or currencies and the market's reaction was muted, analysts here said.

Local strategists said that investors were more focused on seeking out issues whose companies had announced earnings reports for the April-June quarter that beat analysts' expectations.

"We're seeing some company shares reacting after reporting earnings better than analysts' estimates." "I expect Japanese shares to remain firm, and the Nikkei 225 will move toward 16,000 in the next few months as it catches up with other developed markets," Seiji Iwama, a fund manager at Daiwa SB Investments Ltd. , said.

Other analysts were slightly more circumspect for the market's mid-term view, believing that although good earnings would be a boon for the market, some expectations for robust earnings have already been priced in.

"There are expectations for good earnings, which is positive but also mostly priced in." "We'll be trading in a narrow range through August unless the yen really breaks out and weakens a lot. Valuations are relatively good compared to the U.S., so there won' t be too much selling of Japanese shares," Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co., said.

With a relatively firm U.S. dollar trading in the upper 101 yen zone in currency markets Friday, some exporters and tech-related issues responded well, as their competitiveness in overseas markets and profits when repatriated both increase when the yen is weak.

Consumer electronics giant Sony added 2.81 percent to 1,791 yen and Toyota accelerated 0.60 percent to 6,107. Smaller rival Suzuki Motor also closed in positive territory, advancing 2.5 percent to end the week at 3,343.50 yen.

Industrial robotics maker Fanuc was very much in the spotlight Friday, leaping 5.3 percent to 18,39 yen, following the firm posting a 99 percent gain in first-quarter net income to 45.2 billion yen (444 million U.S. dollars), far exceeding analysts expectations for 41.3 billion yen.

Chugai Pharmaceutical surged 9.8 percent to 3,350 yen, marking the firm's highest close since being listed on the exchange, following it posting a net income of 28.9 billion yen for the six months ended June 30, increasing from the 25.3 billion yen logged in the same period last year.

Trading company Itochu also attracting buying after announcing a share buy back scheme worth as much as 110 billion yen. The company also announced a tie-up with Thailand's Charoen Pokphand to expand food supply. The stock ended the week at 1,348 yen, a rise of 2.5 percent.

Civil engineering and general contracting firm Shimizu Corp. jumped 6.8 percent to 805 yen, following its share-price target being raised from 860 yen to 1,250 yen and its rating being held at "outperform" by Mitsubishi UFJ Morgan Stanley Securities Co.

Brokerages comprised the day's best performing sector, with Daiwa Securities Group adding 2.3 percent to 850.30 yen, while Japan's top brokerage, Nomura Holdings, gained 2.1 percent to 671. 60 yen.

But Advantest was a notable loser on the last trading day of the week, plummeting 6.7 percent to 1,151 yen, after the company announced a 1.3 billion yen net income for the last quarter, less than median analysts' expectations of 2.3 billion yen.

Trading volume on Friday rose to 2.09 billion shares on the Tokyo Exchange's First Section, up from Thursday's volume of 195 billion shares, with advancing issues outnumbering declining ones by 1,335 to 345.

Editor: Fu Peng
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