September 13, 2012 / 7:00 AM / 5 years ago

Nikkei gains ahead of Fed, fails to break 9,000

* Apple suppliers see gains after iPhone 5 unveiled
    * Nikkei up 0.4 pct, Topix rises 0.3 pct
    * Shippers rise sharply on short-covering

    By Dominic Lau
    TOKYO, Sept 13 (Reuters) - Japan's Nikkei average rose on
Thursday to end just below the key 9,000 mark on mounting
expectations of fresh stimulus from the U.S. Federal Reserve,
with big gains for shippers and Apple suppliers buoying the
market.
    Investors covered bearish bets ahead of the Fed decision
later in the day as they wait to see if it will launch another
round of bond-buying to kick start a flagging economic recovery
in the United States.
    Battered shippers were the best sectoral
performer, up 5.5 percent, while heavily shorted Nippon Sheet
Glass Co Ltd climbed 5.2 percent.
    "Anything with big shorts out there were reaping today," a
senior dealer at a foreign bank said. "It's basically squaring
up in case something does come out of that."
    The Nikkei advanced 0.4 percent to 8,995.15, but
faced resistance at its 200-day moving average at 8,998.64.
    Expectations of a third round of quantitative easing have
grown since last Friday's disappointing U.S. jobs data. Fed
Chairman Ben Bernanke, who framed employment concerns as a
justification for further stimulus in a speech last month, will
hold a news conference at 1815 GMT, while a statement on
interest rate policy will be released at 1630 GMT.
    Some market participants were concerned that further U.S.
stimulus would weigh on the dollar against the yen, hurting
Japanese exporters.
    The first round of quantitative easing from the Fed helped
the Nikkei surge 23 percent in the subsequent three months, and
it climbed nearly 12 percent for the same period after the
second dose of stimulus.
    But the yen is much higher now, hitting a seven-month high
of 77.651 yen against the dollar on Thursday. That compares with
a level of around 95 yen to the dollar in the three months after
the first QE and around 80-84 yen for the same period after the
second round.
    The Nikkei is up 6.4 percent so far this year,
underperforming a 14.2 percent rise in the U.S. S&P 500 
and a 11.6 percent gain in the pan-European STOXX Europe 600
.
    "(The QE3) will be good for the global economy, obviously
for United States in particular. The market will be in the phase
of the so-called 'risk-on' again," said Hidehiro Tomioka, head
of equity investment at Manulife Asset Management in Tokyo.
    "The (Japanese) market is sort of in the low range of a
trading range, so I think there is room for the market to go
up."
    The broader Topix index added 0.3 percent to 744.23
on Thursday. Nearly 1.29 billion shares changed hands, down from
Wednesday's 1.55 billion and last week's average of 1.61
billion.
    In terms of valuations, the Topix carries a 12-month forward
price-to-book ratio of 0.82, way below the S&P 500's 1.93 and
the STOXX Europe 600's 1.33, according to Thomson Reuters
Datastream.
    
    AN APPLE A DAY
    Thursday's rise was also partly driven by gains in Apple Inc
 component suppliers after the iPhone maker launched its
latest smartphone. 
    Meiko Electronic Co Ltd, Taiyo Yuden Co Ltd
, Murata Manufacturing Co Ltd, Foster Electric
Co Ltd and Mitsumi Electric Co Ltd were up
between 2.3 and 10.7 percent. 
    TDK Corp advanced 3.7 percent, with traders saying
the hard-disk drive and electronic parts maker makes Wi-Fi
modules, batteries and inductors for Apple.
    Industrial robot maker and index heavyweight Fanuc Corp
, whose clients traders said include Hon Hai Precision
Industry, an Apple supplier, gained 1.8 percent.
    Social network companies DeNA Co Ltd and Gree Inc
 surged 6.3 and 7.2 percent respectively, boosted by a
price target hike for DeNA from Nomura. DeNA was the most-traded
stock on the main board by turnover, followed by Gree.       
   Sentiment for the industry was also lifted after Apple
updated its operating system on the iPhone with an embedded
Facebook application, lifting Facebook Inc 7.7 percent.

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