RTRS: Nikkei rises on China rate cut, Panasonic plunges
By Rika Otsuka
TOKYO (Reuters) - Japan's Nikkei average edged up 0.6 percent on Friday, cheered by an interest rate cut China but held back by a plunge in Panasonic Corp (6752.T: Quote, Profile, Research, Stock Buzz) after a drastic cut in its outlook.
Gains were led by shipping firms such as Kawasaki Kisen (9107.T: Quote, Profile, Research, Stock Buzz), trading houses such as Itochu Corp (8001.T: Quote, Profile, Research, Stock Buzz) and construction machinery companies such as Komatsu Ltd (6301.T: Quote, Profile, Research, Stock Buzz), extending advances made a day earlier after China axed rates by over 100 basis points on Wednesday to prop up growth.
"China-related shares continue to rally on expectations that China's rate cut will support its economy," said Toshiyuki Kanayama, a market analyst at Monex Inc.
Meanwhile, weak output data and the downward revision by Panasonic kept investors careful about chasing prices higher, analysts said.
Panasonic, the world's No.1 plasma TV maker, dived 11 percent after cutting its annual net profit forecast by 90 percent and announcing plans to restructure as the global financial crisis dampens sales of TVs and other electronics.
"Panasonic's earnings forecasts underscored the deteriorating health of the economy," said Terushi Hirotama, head of trading at Ichiyoshi Securities.
"Until recently, investors had believed that Panasonic could withstand the downturn. But now, investors are saying 'Panasonic. You too?'
The benchmark Nikkei .N225 climbed 47.70 points to 8,421.09 after rising 2 percent the previous day. The broader TOPIX index .TOPX was little changed on the day at 828.82.
Trade was thin, with 746 million shares changing hands on the Tokyo exchange's first section compared with last week's morning average of 932 million. Declining shares outnumbered advancers 794 to 774.
Many investors took a back seat as there were fewer fresh factors from overseas after U.S. financial markets were closed on Thursday for the Thanksgiving holiday.
Government data showed on Friday that Japanese industrial production dropped sharply in October, prompting warnings that Japan's recession will be even deeper and longer than previously thought.
On the other hand, data showed Japan's unemployment rate unexpectedly fell to 3.7 percent in October, down from 4.0 percent in September.
Kawasaki Kisen climbed 4.9 percent to 383 yen, Itochu advanced 6.3 percent to 471 yen and Komatsu jumped 5.6 percent to 1,130 yen.
JFE Steel Corp, the world's third-largest steelmaker, said on Friday it was considering building a plant to process iron ore in the Middle East.
JFE Holdings (5411.T: Quote, Profile, Research, Stock Buzz), the parent company of JFE Steel, rose 4.9 percent to 2,265 yen.
Panasonic tumbled 11 percent to 1,143 yen after hitting a five-year low of 1,131 yen.
