September 6, 2012 / 3:05 AM / in 8 years

Japan's Nikkei flat as investors await ECB meeting

TOKYO (Reuters) - Japan’s Nikkei share average closed flat o n Thursday, having barely stirred through the day as investors anxiously awaited a policy review at the European Central Bank, hoping for new measures to tackle the euro zone debt crisis.

A man passes an electronic board displaying market indices from around the world outside a brokerage in Tokyo August 23, 2012. REUTERS/Yuriko Nakao

Shares of shipping firms sank after a source said Japan’s Fair Trade Commission is investigating more than 10 companies over possible bid-rigging and price-fixing for Japanese auto shipments, although gains in index heavyweight Softbank Corp (9984.T) lent support.

The Nikkei .N225 tiptoed up 0.75 point to 8,680.57, snapping a five-day losing streak, its longest bearish run since early July.

Nippon Yusen KK (9101.T) dropped 5.3 percent and Mitsui O.S.K. Lines (9104.T) sagged 2.7 percent, while Kawasaki Kisen Kaisha Ltd (9107.T) pared gains to end flat, after company representatives said FTC officials had been at their offices on Thursday to investigate, but gave no further details. The FTC declined to comment.

The shipping sector .ISHIP.T has lost 32.3 percent this year on thinning global demand and falling prices.

“I can’t see many people placing calls on the index right now, it’s likely to drop well below 8,500 for next week’s options settlement,” said Fumiyuki Nakanishi, general manager of investment research at SMBC Friend Securities.

Sources told Reuters that the ECB is ready to waive seniority status on government bonds it buys under a new programme, which it is set to agree on at a Governing Council meeting later on Thursday.

Market players say ECB action is now priced into the market, but some remain uneasy about the consequences of the bank’s purchases of sovereign debt.

“If the ECB buys Spanish and Italian bonds, it’s likely to ultimately be a bad thing for Spain and its banks as it will scare away other investors from buying their bonds,” said Nakanishi.

However, others said the scale of the programme would determine whether it is a boon or a curse.

“As long as the ECB don’t buy an unlimited amount, I think sellers will start to disappear,” said Ryota Sakagami, chief strategist of equity research at SMBC Nikko Securities.

The broader Topix .TOPX index inched up 0.1 percent to 719.00 in moderate trade. Volume was at 95.1 percent of the full-day 90-day average.


Losses in shares such as Sharp Corp (6753.T) — which dropped 4.3 percent after Moody’s Investors Service cut the short-term debt rating on the embattled TV maker to junk — were offset by gains in automakers, among others.

“We have seen a pick-up in activity. We have got one of the better flows we have seen for a while ... no real sector tilt,” a senior dealer at a foreign bank said. “Our flow is balanced. If our flow is representative of what’s going in the market, our flow suggests it’s going to be flat.”

Yamaha Motor Co Ltd (7272.T) jumped 10.7 percent after its president said the motorcycle maker expects to beat its annual sales target in Indonesia of 2.4 million two-wheelers by some 100,000 units.

Toyota Motor Corp (7203.T) rose 1.6 percent and Honda Motor Co Ltd (7267.T) gained 1 percent after the companies posted strong U.S. auto sales for August.

Softbank Corp gained 2.4 percent and was the most traded stock on the main board as investors were upbeat about the company after Chairman and CEO Masayoshi Son’s presentation at the Bank of America Merrill Lynch conference on Wednesday. Its share price has gained 41.2 percent this year.

($1 = 78.3150 Japanese yen)

Additional reporting by Dominic Lau; Editing by Chris Gallagher

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