Nikkei hovers around 33-month high on soft yen, Panasonic soars

Mon Feb 4, 2013 3:26am GMT

* Panasonic soars 16.9 pct after posting Q3 profit
    * Sony jumps, still undervalued - analyst
    * Financials in focus, profits benefit from booming stock
market
    * Yen softens further, hits fresh 33-month low

    By Sophie Knight
    TOKYO, Feb 4 (Reuters) - Japan's Nikkei share average
climbed to a fresh 33-month peak on Monday morning as a softer
yen led exporters higher, and hints of a recovery for troubled
consumer electronics companies saw Panasonic Corp storm
up 16.9 percent in heavy trade.
   Panasonic hit a nine-month high after reporting a return to
profit in the last quarter and sticking with its full-year
earnings forecast as it moves its business away from loss-making
TVs in favour of household appliances. 
   Bailed-out Sharp Corp jumped 7.9 percent after
saying it had eked out quarterly operating profit on Friday,
improving its chances of convincing lenders and shareholders
that it remains a viable firm. 
   Sony Corp, meanwhile, hogged the most-traded spot on
the mainboard by turnover, where it has spent much of the past
two weeks, climbing 9.5 percent on optimism about its earnings
and forecasts on Thursday. 
   "There are high expectations for the new games console after
the Playstation 3, particularly because people think it can beat
Nintendo, which is doing pretty badly," said Yoshihiko Tabei,
chief analyst at Kazaka Securities. 
   "Ideally Sony's main business will return to profit so that
it doesn't need to sell off its assets any more - but it's
price-to-book ratio is still 0.7, so it's still very cheap,"
Tabei added, saying that the softer yen is also spurring gains
for the company.
   The Nikkei added 0.5 percent to 11,245.37 by midday, coming
away from a fresh 33-month high of 11,270.56 struck earlier in
the session after the dollar strengthened on strong U.S. jobs
and manufacturing data.
    The Japanese currency, already on a rapid downward trend due
to an aggressive campaign of fiscal and monetary expansion from
new Japanese Prime Minister Shinzo Abe, slumped to a fresh
33-month low of 92.83 versus the dollar by early Monday morning.
    "If the yen gets to 95 by the end of March, carmakers and
other exporters are definitely going to beat their forecasts
with revenue from their U.S. subsidiaries," said Fumiyuki
Nakanishi, general manager of investment and research at SMBC
Friend Securities.
    "But for the moment management are being cautious with their
exchange rate assumptions, so I expect the Nikkei to take a
breather after their results this week," Nakanishi added. 
    Mazda Motor Corp, which has risen 154 percent since
mid-November, when Abe began calling for a softer yen, put on
5.8 percent on Monday morning, while Nissan Motor Co Ltd
 added 3.2 percent. 
    Japan's earnings season is now in full swing, with Japan
Airlines Co Ltd and Hitachi Ltd among those to
report after the close on Monday.
    However, the last quarter's results have shown little
evidence of the exchange rate's benefits, with two-thirds of the
77 Nikkei companies reporting so far missing analysts'
estimates, according to Thomson Reuters Starmine.
 
    "There have been two very different reactions to bad
results: one, the stock is simply sold off, or two, it is bought
up because there's positive signs of what's to come," said
Masayuki Doshida, senior market analyst at Rakuten Securities.
    "So Nintendo was sold off after it cut its forecast even
though the yen is weak, but Komatsu was bought up despite
cutting its forecast because there's signs of a pick-up in
China, where it has high exposure," he added.
    Financials, which investors have singled out for the
potential boost to their profits from the booming stock market
rally, remained in focus, with megabanks Mizuho Financial Group
Inc and Sumitomo Mitsui Financial Group Inc 
advancing 3.3 and 4 percent, respectively. 
   The broader Topix rose 1.1 percent to 952.73 by the
midday break in very heavy trade, with its volume at 98.2
percent of its full-day average over the last 90 days.