Nikkei set to rebound from 1-wk closing low on US fiscal hopes

Wed Nov 28, 2012 11:14pm GMT

TOKYO, Nov 29 (Reuters) - Japan's Nikkei average is expected
to rebound on Thursday from a one-week closing low as investors
took comfort from comments from the top Republican in U.S.
Congress that he was optimistic on averting the so-called
'fiscal cliff'.
    John Boehner's remarks helped ease investor concerns the
'fiscal cliff' -- about $600 billion of spending cuts and tax
increases taking effect in the new year -- could tip the world's
largest economy into recession, and lifted U.S. stocks
overnight. 
    "Yesterday's fall was due in part to fears of the U.S.
fiscal situation, and there appears to be some progress and U.S.
shares recovered, so the drop likely won't be repeated today,"
said Hiroichi Nishi, equity general manager at SMBC Nikko
Securities.
    "The stronger yen will weigh on the market, but there could
also be month-end buying."
    The Nikkei was likely to trade between 9,300 and
9,400, strategists said, while Nikkei futures in Chicago closed at 9,345 on Wednesday, up 0.5 percent from the
Osaka close of 9,300.
    On Wednesday, the Nikkei shed 1.2 percent to 9,308.35,
hitting a one-week closing low and snapping a four-session
winning streak. The broader Topix dropped 1.3 percent to
771.39.
    The benchmark Nikkei has rallied 7.4 percent over the past
two weeks, taking the month-to-date gain to 4.3 percent, on
track for its best monthly performance since June.
    The Nikkei is up 10.1 percent so far this year, trailing a
12.1 percent rise in the U.S. S&P 500 and an 11.7 percent
gain in the pan-European STOXX Europe 600.
    Still, Japanese equities are more expensive than their
European counterparts, with a 12-month forward price-to-earnings
of 12 versus STOXX Europe 600's 11, data from Thomson Reuters
Datastream showed. The S&P 500 has a 12-month forward P/E of
12.5.
    
        
> Wall St jumps in another 'fiscal cliff' swing             
> Euro edges lower as Greece, U.S. fiscal woes weigh      
> Treasuries gain on standoff in U.S. budget talks         
> Gold drops 1.5 pct on deflation fears, fund sales       
> Oil falls as demand worries trump fiscal cliff hope      
    
    STOCKS TO WATCH
    --JFE HOLDINGS INC 
    Steelmaker JFE is expected to generate positive free cash
flow of about 100 billion yen ($1.2 billion) this fiscal year,
due to lower costs, smaller inventories and lower capital
expenditures, the Nikkei newspaper said. 
    --FUJI HEAVY INDUSTRIES LTD 
    Fuji Heavy Industries will cut exports of Subaru vehicles to
China by about 80 percent to avoid further increase in excess
inventory, the Nikkei said.