TRD: Nikkei edges up 0.16 pct on surprise machinery order jump
Tokyo stocks inched higher Wednesday with the key Nikkei stock index rising 0.16 percent on improved investor sentiment following an unexpected rise in Japan's machinery orders and positive earnings reports in the U.S. by companies like Intel Corp.
Brokers maintained however that investors remained somewhat circumspect towards chasing higher issues at the yen remained near 15-year highs versus the U.S. dollar and speculation is rife about global monetary easing policies which would cause an increase of funds to flow into stocks. "The trend for a weaker dollar against the yen is not taking a breather and that is weighing on stocks," said Hiroichi Nishi, equity division manager at Nikko Cordial Securities Inc, adding that there are expectations that abundant supplies of funds injected by monetary easing globally would flow into stocks.
Other strategists said that the appeal for Japanese stocks is further weakening despite possible currency intervention as the prior moves by Japan's central bank failed to curb the yen's persistent strength.
"Stocks advanced on expectations the Fed will pursue further monetary easing, but the gain ran out of steam in Japan because fundamentally there are no reasons to buy Japanese stocks," said one local strategist.
"Banks and real-estate companies climbed after the Bank of Japan took easing measures, but the effect did not last for long," he said.
The 225-issue Nikkei Stock Average rose 14.87 points from Tuesday to 9,403.51, bringing an end to a three-day losing streak, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange retreated 1.95 points, or 0.24 percent, to 822.65.
Japan's core machinery orders rose a seasonally adjusted 10.1 percent in August from a month earlier to 843.5 billion yen (10.3 billion U.S. dollars), the Cabinet Office said in a report on Wednesday.
August's figure, which far exceeded market expectations, marks the third straight month of growth, the government report said, despite concern being voiced over the impact of the yen's strength on corporate spending.
Subsequently machine-related issues rose with THK Co., an industrial machinery maker, advancing 3.7 percent to 1,651 yen and Okuma Corp., a maker of machine tools and industrial machinery, rising 1 percent to 497 yen. Meanwhile Fanuc Inc, a maker of industrial robots, jumped 2.3 percent to close at 11,010 yen.
Some chip-related stocks advanced after shares of Intel, the world's largest chipmaker, rose on strong fourth-quarter sales and margins.
Chip-gear maker Tokyo Electron Ltd. gained 1.3 percent to 4,550 yen, while Nikon Corp. a maker of chip steppers, rose 0.9 percent to 1,599 yen. Yokogawa Electric Corp. climbed 2.6 percent to 599 yen.
Bucking the trend however was Disco Corp., a maker of chip- manufacturing equipment, who sank 5.8 percent to 4,600 yen, the biggest drop since Nov. 4.
Operating profit at Disco totaled about 6 billion yen (73 million U.S. dollars) in the quarter ended in September, short of its profit outlook of about 6.5 billion yen, the Nikkei newspaper reported.
As Japan's earnings season approaches, early figures are beginning to determine some swings in the market.
Best Denki Co., an electronics retailer, surged 11 percent to 222 yen. The company raised its annual net income forecast by 61 percent to 2.4 billion yen (29 million U.S. dollars), citing higher demand for air-conditioners and benefits from shutting unprofitable stores and job cuts.
Saizeriya Co., an Italian-food restaurant chain, rose 2 percent to 1,597 yen. The company swung to a full-year net income of 7.84 billion yen (95.7 million U.S. dollars) from a year-earlier loss on higher sales. It expects an 8.2 percent drop in net income to 7. 2 billion yen in the current fiscal year.
Tokyo Steel Manufacturing Co., a steelmaker, tumbled 5.4 percent to 921 yen and was a notable decliner on today's market.
The company had a first-half net loss of 2.5 billion yen, missing its 1 billion yen profit outlook, according to a preliminary earnings statement. The company earned 1.65 billion yen a year earlier.
Some 1.89 billion shares changed hands on the Tokyo Exchange's First Section on Wednesday, marginally lower than Tuesday's volume, with declining issues outnumbering advancing ones by 892 to 604.
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