Nikkei may hold steady, focus turns to BOJ's Tankan survey

Mon Jul 1, 2013 12:20am BST

TOKYO, July 1 (Reuters) - The Nikkei average may hold steady
on Monday after posting its biggest one-day rise in three weeks
in the previous session, though the early focus for investors
will be on the Bank of Japan's Tankan survey to gauge the impact
of the government's sweeping stimulus policies.
    The Nikkei is likely to trade between 13,500 and
13,750, strategists said, after jumping 3.5 percent to a
three-week high of 13,677.32 on Friday. The broader Topix
 index advanced 3.2 percent to 1,133.84 in the previous
session. 
    Nikkei futures in Chicago closed at 13,700 on
Friday, up 0.4 percent from the Osaka close of 13,640.
    "We had a big rebound in the Nikkei last Friday, so we may
see some profit-takings. I think there was some window dressing
last Friday as it was month-end and quarter-end," said Takashi
Hiroki, chief strategist at Monex Inc.
    A weaker yen should offer support to the equity market. The
Japanese currency was last traded at 99.34 yen to the dollar as
investors resumed pricing in the possibility of the U.S. Federal
Reserve beginning to scale back its bond-buying programme as
soon as its September policy meeting.
    Hiroki said investors would focus on the BOJ's quarterly
Tankan survey of business sentiment, which is due to release
shortly before the market opens. 
    "If we can confirm steady corporate investment plan, that
will be a positive factor to the market," he said.
    The Nikkei rallied more than 80 percent to a 5-1/2 year peak
 on May 23 since November, when prime minister Shinzo Abe's
election campaign promised bold fiscal and monetary expansionary
policies to revive the world's third-largest economy, dubbed
"Abenomics." 
    But since then, the benchmark has lost 14 percent on
concerns over the Fed paring its stimulus, slowing growth in
China - Japan's second-largest export market, and disappointment
over Abe's growth strategies.
    Japanese equities' 12-month forward price-to-earnings ratio
fell to 13.3 - a level not seen since early April - from a
three-year high of 16.3 reached four weeks ago according to
Thomson Reuters Datastream.
    The Nikkei is still up nearly 11 percent since the Bank of
Japan announced radical monetary stimulus on April 4 and has
risen almost 32 percent this year.
                                 
> S&P 500 posts best first half since 1998                  
> Dollar rises on talk of cutback in Fed easing by Sept   
> Benchmark Treasuries dip as volatile quarter ends        
> Gold posts worst quarter on record despite rally Friday 
> Brent posts 3rd straight quarterly loss                  

    STOCKS TO WATCH
    --SONY CORP 
    Sony, which is studying a partial spinoff of its studio at
the urging of major shareholder Daniel Loeb, suffered its second
box office misfire of the summer season when its action movie
"White House Down" opened with ticket sales below industry
forecasts. 
    --LIXIL GROUP 
    Lixil, a housing facilities manufacturer, said on Friday it
will buy toilet and plumbing facilities maker ASD Americas
Holding Corp (American Standard) for $542 million.
 
    --HONDA MOTOR CO 
    Honda's U.S. subsidiary will recall more than 143,000
subcompact cars to replace faulty window switches that pose a
potential fire hazard, the Japanese automaker said Friday.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.