RTRS: Nikkei edges up, trading houses rise but yen weighs
Japan's Nikkei stock index rose 0.4 percent on Wednesday with trading houses up after a brokerage upgraded Mitsubishi Corp, but gains were limited as a slightly firmer yen dragged on exporters such as Honda Motor Co.
Nissan Motor Co rose 4.8 percent after the automaker said on Tuesday orders for its low-emission cars are up 30 percent in Japan so far in May from the same period a year earlier, helped by new government tax incentives for low-emission vehicles.
First quarter gross domestic product (GDP) shrank a record 4 percent as a plunge in global demand drove Japan's export-driven economy further into recession, but that was smaller than the 4.2 percent drop expected by economists, and the market shrugged it off.
"There was some reassurance from the GDP figures coming in about as expected," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
"The market was a bit disappointed by yesterday's U.S. housing figures, but recent indicators have been coming in quite strong, so people were probably expecting too much."
U.S. housing starts and permits fell unexpectedly to record lows in April.
Investors were heartened, though, by the Chicago Board Options Exchange Volatility index, known as Wall Street's "fear gauge," falling below 30 for the first time since the collapse of Lehman Brothers eight months ago.
The benchmark Nikkei gained 40.17 points to 9,330.46, while the broader Topix rose 0.4 percent to 883.06.
Resistance was seen just below 9,500, where the Nikkei's 200-day moving average comes in. The Nikkei touched a six-month high of 9,503 on May 11 but has been unable to break higher.
"Right now, there aren't a lot of reasons to buy," said Takahiko Murai, general manager of equities at Nozomi Securities.
EXPORTERS ENERVATED, TRADERS TOUGH The yen edged up 0.2 percent against the dollar after falling the previous day following improved business sentiment in Germany, which helped lift investor confidence and boosted the appeal of riskier assets.
By late morning it was trading around 95.73 yen, off a two-month low of 94.55 set earlier in the week.
Honda slipped 1.3 percent to 2,670 yen and Toyota Motor Corp lost 1.1 percent to 3,640 yen. Kyocera Corp edged down 0.5 percent to 7,430 yen.
But trading houses powered higher on a combination of strong oil prices and a ratings upgrade for Mitsubishi, the largest trading house in Japan.
Oil hovered just below $60 a barrel after finishing almost 1 percent higher the previous day as a flurry of refinery problems stoked supply fears at the start of the U.S. summer driving season.
