* Nikkei closes above 25-day moving average
* Investors wary, central bank action seen as stopgap move
* Strong resistance around 8,700-8,750
* China-related shares up after PBOC monetary easing
By Mari Saito
TOKYO, Dec 1 The Nikkei stock average
surged to a two-week high, breaking above a major resistance
level on Thursday, after the world's central banks took
coordinated action to ease funding strains among banks caused by
the debt crisis in Europe.
The central banks' move to offer cheaper dollar funding
eased worries about an immediate meltdown in the global
financial system, but market players remained cautious about
prospects for resolution of the crisis.
"This just means they expanded emergency measures. The more
important point is whether Europe is going to have a bigger
bailout fund, and that's still up in the air," said Soichiro
Monji, chief strategist at Daiwa SB Investments.
Volume spiked to its highest since Oct. 28, with 2 billion
shares changing hands on the main board, up 29 percent from its
The benchmark Nikkei rose 1.9 percent to 8,597.38,
climbing above its 25-day moving average of around 8,577 and
rising at one point to 8,653, its highest level since Nov. 14.
The broader Topix index climbed 1.6 percent to
But selling by European pension funds continued,
underscoring the potential for distress in the euro zone to push
the market lower.
"A lot of blue chips are being bought, simply because they
dropped to rock bottom last month," said Masayoshi Okamoto, head
of dealing at Jujiya Securities.
"For the short term it would be safer to buy defensives and
stocks dependent on domestic demand in case of sudden exchange
rate moves or European concerns."
The Nikkei faces more resistance from its 75-day moving
average around 8,687 and above that the daily Ichimoku cloud
looms at 8,704-8,746.
But Yutaka Miura, senior technical analyst at Mizuho
Securities said he did not expect the benchmark to get near the
Ichimoku cloud ahead of a meeting of European leaders on Dec. 9,
a summit seen as a make-or-break moment for the region.
With the expiry of Nikkei December futures options due next
Thursday, the option strike price of 8,750 may also become a
resistance point, market participants said.
CHINA-RELATED STOCKS SOAR
Construction makers and shippers, the main beneficiaries of
China's booming economy, were among the top performers after
China's central bank cut reserve requirements for commercial
lenders on Wednesday for the first time in three years.
The Nikkei China 50 sub-index outperformed the
broader market and gained 2.8 percent.
Construction machinery maker Komatsu Ltd jumped 7.2
percent to 2,032 yen while rival Hitachi Construction
rose 7.3 percent to 1,423 yen. Mitsui OSK Lines rose
8.4 percent to 259 yen.
Japan's mobile carriers Softbank Corp and KDDI Corp
fell on a report that NTT Docomo Inc was also
planning to sell Apple's iPhones and iPads in Japan.
Softbank, which had until recently been the sole provider of
the iPhone in Japan, dropped 5.1 percent to 2,419 yen and was
the heaviest-traded share by turnover on the main board.
Shares in Docomo, which denied the report, rose
2.3 percent to 138,100 yen while KDDI fell 1.7 percent to
Shares of drugmaker Daiichi Sankyo Co Ltd rose 2
percent to 1,400 yen after U.S. authorities gave its subsidiary
Ranbaxy Laboratories Ltd the green light to make the
first generic version of Lipitor, a blockbuster
Japanese financials bounced back from recent losses, with
the banking sub-index gaining 1.6 percent, buoyed by
gains in their U.S. counterparts. Sumitomo Mitsui Financial
Group climbed 3 percent, and Mitsubishi UFJ Financial
Group rose 3.1 percent.
Nomura Holdings Inc was up 2.8 percent at
255 yen, after earlier climbing to its highest level in almost a
month. The investment bank's shares fell to its lowest in
almost 37 years last week, as thin trading volumes and withering
share prices threatened brokerages' profit outlooks.
Advancing shares outnumbered declining issues 3 to 1.
(Additional reporting by Hideyuki Sano; Editing by Edwina