March 1, 2012 / 3:01 AM / 5 years ago

Nikkei climbs 0.4 pct, nears 9,800 level

 * Softer yen, Japan capex data support stocks
 * Major exporters gain on weaker yen
 * Softbank tops core 30 list, wins spectrum
 * Kyocera rises after target price hikes
 * Worries remain that market is overheated
 By Mari Saito	
 TOKYO, March 1 (Reuters) - Japan's Nikkei average
pared earlier gains, but held near 9,800 on Thursday, boosted by
an unexpected jump in fourth-quarter capital expenditure by
Japanese companies, while the softening yen and the European
Central Bank's liquidity move underpinned sentiment.	
 In an encouraging sign of an uptick in demand, Japanese
companies increased their capital spending by 7.6 percent in the
October-December period, better than the median estimate for a
6.5 percent annual decline. 	
 The benchmark Nikkei advanced 0.4 percent
to 9,757.20 by the midday trading break. The index pared gains
after earlier hitting an intraday high of 9,865.75 after the
previous day's rally above the key 9,800 level also proved
unsustainable and the benchmark ended flat.	
 The broader Topix index added 0.1 percent at 836.69.	
 "The capex data was much better than previous estimates and
that, combined with the yen, which is softer today against the
dollar, is prompting buying in all major sectors like
financials, autos, machinery and real estate," said Masayuki
Doshida, senior market analyst at Rakuten Securities.	
 The dollar was trading at 81.13 yen, moving back
toward a nine-month high of 81.661 yen hit earlier this week.	
 Among export-oriented bluechips, Toyota Motor Corp 
gained 0.6 percent in heavy volume, while Sony Corp 
climbed 1.1 percent and Canon Inc advanced 1.4 percent.	
 Societe General wrote in a note to clients on
Wednesday that the yen was near its best level and recommended
clients buy a three-month call spread for the Nikkei between
9,750 and 10,750.	
 "If the rising yen was responsible for the underperformance
of the Nikkei, the fall of the yen is upbeat. We propose a call
spread to take exposure to the Nikkei," the bank wrote.	
 Softbank Corp was up 1.9 percent and topped the
Topix Core 30 list as the biggest percentage gainer
after it won coveted 900 Megahertz spectrum for high-speed
mobile services as it races to strengthen its network.	
  A trader said Softbank offered good risk/return as its
performance lagged the Topix Core 30 this year, but
added that a potential issue was how the company would fund any
capital expenditures.	
 Trading volume on the Nikkei was at 67.2 percent of its
average daily 90-day volume. 	
 	
 FLAT-FOOTED	
 As the benchmark approached 9,800 with an eye on
the key 10,000 level, market participants expressed worries
about overheating and potential catalysts for a correction. 	
 "A lot of people were caught flat-footed in this rally and
they're questioning their own uncertainty about the direction of
the market because it doesn't gel with the bullish market," said
a trader at a foreign brokerage. 	
 The trader said although the market continues to rise,
market participants were still cautious and many were anxious to
sell-off now to lock in profits.	
 Technical indicators fanned such market worries, with the
14-day relative strength index at 82.9, deep in "overbought"
territory.	
 Market players said the ECB's liquidity operation overnight,
although helping to support bullish market sentiment, did not
contribute to the Nikkei's gains.	
 A total of 800 banks grabbed 530 billion euros ($709
billion) at the ECB's offering of cheap three-year funds on
Wednesday, slightly more than analysts had expected for the
bank's second long-term refinancing operation. 	
 Kyocera Corp climbed 1.7 percent to a six-month
high of 7,310 yen after Morgan Stanley MUFG and J.P. Morgan
raised their price targets following a meeting with the
electronics firm's president, Tetsuo Kuba, on Feb 29.	
 J.P. Morgan raised its price target to 7,800 yen from 7,000
yen, while Morgan Stanley MUFG lifted its price target to 7,700
from 7,000, but kept its "equal weight" rating.	
U.S. stocks slipped overnight after Federal Reserve chairman
Ben Bernanke offered a tempered view of the U.S. economy and
gave no hint of further easing moves, disappointing investors
hoping for a signal of more stimulus.	
 ($1 = 0.7476 euros)	
	
 (Additional reporting by Dominic Lau; Editing by Matt Driskill)	
 

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