* Steadying yen provides index support
* Automakers, financials rebound
* Sharp down on report to post bigger net loss
By Dominic Lau
TOKYO, April 10 (Reuters) – Japan’s Nikkei average rose on
Tuesday, on track to end a five-session losing run, ahead of
trade data from China and a Bank of Japan policy meeting, with
the yen coming off a one-month high against the dollar hit the
pervious day.
The steadying yen, after strengthening on the back of
Friday’s disappointing U.S. jobs data, gave Japanese exporter
shares some breathing space and helped lift the index higher.
The Nikkei advanced 0.7 percent to 9,615.12 after
shedding more than 5 percent in the previous five sessions and
hitting the lowest closing level since Feb. 21 on Monday.
Exporters that were in demand, included Toyota Motor Corp
, Honda Motor Co, Nissan Motor Co and
TDK Corp, up between 0.9 and 2.4 percent.
Sharp Corp shed 2.4 percent after a Nikkei report
said the company was expected to post a bigger net loss for the
2011 fiscal year than had previously been projected, hurt by
poor sales of televisions and solar cells.
“People are looking to buy bombed out stocks or looking to
take profit in stocks like Oki Electric,” a dealer at a foreign
bank said, adding that many players were on the sidelines before
the Chinese data and BOJ meeting.
Oki Electric Industry Co Ltd dropped 1.5 percent,
although it is still up more than 90 percent this year.
Despite the recent pullback, the auto sector outperformed
the broader market. Nomura recommended investors short the
sector, however, citing the halt in yen weakness.
“With the market’s risk-on sentiment fading, we think
high-beta sectors including automobiles and transport equipment
could see spreading profit-taking in the near term,” it said in
a report.
“Although sector valuations continue to look relatively low,
we have lowered our stance on the sector to short in view of a
halt in yen depreciation, with which sector performance is
closely correlated, and of signs from a technical perspective
that the sector could soon enter a correction phase.”
The transport equipment sub-index, home to Toyota
and Nissan, rallied 32 percent in January-March, outperforming a
19.3 percent in the Nikkei, although the sector is down 4.9
percent since the start of April.
The broader Topix index was up 0.9 percent at 820.79
on Tuesday.
The BOJ is largely expected to refrain from easing monetary
policy, holding fire until a more thorough assessment of the
economy two weeks later, which may show further action is needed
to nudge inflation up towards its 1 percent goal. The central
bank will hold another meeting on April 27.
Financials also bounced, with Mitsubishi UFJ Financial Group
Inc up 1.5 percent and Japan’s top investment bank
Nomura Holdings Inc climbing 2.6 percent.
A price target increase by Bank of America Merrill Lynch
also boosted Nomura shares.
