Nikkei set to trade in range, easing hopes support mood

Mon Jan 7, 2013 11:28pm GMT

TOKYO, Jan 8 (Reuters) - Japan's Nikkei share average is set
to trade in range on Tuesday as investors remain cautious of the
overbought market while yen's weakness has paused, but hopes for
aggressive monetary easing support investor sentiment.
    Market players said the Nikkei was likely to trade
between 10,500 to 10,700 on Tuesday, after ending down 0.8
percent to 10,599.01 on Monday. 
    Nikkei futures in Chicago closed at 10,620, the
same level Nikkei futures closed in Osaka.
    Analysts said that investors are expected to stay on the
sidelines amid signs that the market is overbought, and there
may be some profit-taking on the recent gains of exporters now 
that the weakening of the yen appears to have paused for the
time being.
    "Market sentiment is still positive on the back of hopes for
further easing, but buying may pause on bellwether shares while
small caps may attract buying," said Hiroichi Nishi, general
manager, SMBC Nikko Securities, adding that domestic retail
investors have belatedly come back and have started buying small
caps.
    The dollar traded at 87.42 yen, retreating from a 2-1/2 year
high of 88.48 yen marked on Friday as robust appreciation over
the past month had investors opting to book profits despite
forecasts of further Bank of Japan stimulus later in the month.
    The Nikkei has risen about 22 percent since mid-November 
when Prime Minister Abe started calling for aggressive easing,
taking the index deeper into overbought territory. 
    Its 14-day relative strength index is at 78.09, far above 70
which is considered overbought and often indicates an imminent 
adjustment.
    The broader Topix dropped 0.8 percent on Monday.

> Wall St edges off 5-year high, awaits earnings           
> Euro rises vs dollar ahead of ECB meeting, yen recovers 
> Yields edge up before $66 bln US debt sales             
> Gold falls, Fed asset purchases in focus               
> Oil firm, Brent's premium to U.S. narrowest since Sept  
    STOCKS TO WATCH
    --Sharp Corp 
    Sharp is considering new ways to shore up its crumbling
finances but is not talking with Intel Corp at the
moment about any investment from the U.S. chipmaker, executives
from the Japanese firm said on Monday. 
    Separately, the company had a better-than-expected operating
profit for October-December, its top executive said on Monday,
as the struggling Japanese consumer electronics giant scrambles
to generate profits in the hopes of securing fresh financing.
 
    
    --Mitsui & Co 
    Mitsui said on Monday that it will buy as much as a 30
percent stake in Spanish autoparts maker Gestamp Automocion's
U.S. business for 300 million euros ($391 million).
 
    
    --JX Nippon Oil & Energy Corp 
    Japan's biggest refiner, JX Nippon Oil, has cut contracted
imports of Iranian crude this year by more than 10 percent from
2012 volumes, an industry source with direct knowledge of the
matter said on Monday. 
    
    --Cosmo Oil Co 
    Cosmo has delayed the schedule for the restart of operations
at its 220,000 barrels per day (bpd) Chiba refinery, company
sources said on Monday. 
    
    --Aozora Bank Ltd 
    U.S. buyout firm Cerberus Capital Management LP 
will sell up to 591 million shares in Japanese lender Aozora,
Aozora said in a government filing on Monday. 
    
    --Nintendo Co Ltd's year-end sales of its Wii U
games console were steady, though not as strong as when its Wii
predecessor was first launched, the Japanese game maker's top
executive told Reuters on Monday. 
    
    --Honda Motor Co Ltd and its China joint ventures
sold 63,264 vehicles in the country in December, down 19.2
percent from a year earlier, the Japanese automaker said on
Monday. 
    
    --Nissan Motor Co Ltd and its China joint venture
sold 90,400 vehicles in China in December, down 24 percent from
a year earlier, the Japanese automaker said on Monday.
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