* Sharp edges higher on report of plant sales, job cuts
* Defensives in demand, Softbank up 2.1 pct
By Dominic Lau
TOKYO, Aug 21 (Reuters) – Japan’s Nikkei share average
inched up on Tuesday, building on the previous session’s
three-month closing high, as investors buying of defensive
stocks offset creeping doubts over the European Central Bank’s
plan to tackle the region’s debt crisis.
Expectations that the ECB would take bold action to tackle
the euro zone sovereign debt crisis have helped the Nikkei
rebound 10.3 percent from a seven-week low touched on July 25.
The Nikkei is up 8.6 percent so far this year.
But the market is still awaiting further details of the
ECB’s plans, and the central bank on Monday quashed speculation
about the form of its bond-buying programme, while there are
signs of fatigue after the Nikkei’s sharp run-up.
The Nikkei ticked up 0.1 percent to 9,183.25 by the
midday break, holding above its 26-week moving average at
9,149.52. The benchmark edged up 0.1 percent high on Monday,
hitting a three-month closing high for a second time.
“The jury is out as to whether when we come back after the
summer holidays, we will return to the old uncertainty that we
saw going into the summer holidays,” said Stefan Worrall,
director of equity cash sales at Credit Suisse in Tokyo.
Worrall said investors would be watching for comments from
European policymakers after they return from holidays as to how
they would tackle the currency bloc’s debt problems.
Investors buying into defensive stocks helped to support the
market on Tuesday.
Gains in defensive stocks offered support to the market.
“People are going into defensive and domestic plays,” a
trader at a foreign bank said.
Convenience store operators Seven & I Holdings Co,
Lawson Inc and FamilyMart Co Ltd were up
between 1.2 percent and 1.5 percent.
Mobile operators Softbank Corp and KDDI Corp
were also in demand, up 2.1 percent and 1.1 percent,
respectively.
CAUTION URGED ON SHARP RECOVERY TIMING
Sharp Corp added 0.6 percent and was the most-
traded stock on the main board by turnover after the Yomiuri
newspaper said the embattled TV maker aims to cut 8,000 jobs or
15 percent of its global workforce, including 3,000 from the
sale of two TV factories in China and Mexico.
But traders said Sharp shares were best to avoid as the
company had a long way to recovery.
Short-selling in Sharp increased, with 92.21 percent of its
stock that is available to be borrowed out on loan as of Aug 17,
up from 92.15 percent on Aug 16, according to data provider
Markit.
Economy-sensitive shippers came under pressure,
down 2.3 percent as the worst sectoral performers.
The broader Topix gained 0.3 percent to 766.82 in
light trade after the morning session, with 37 p ercent of its
full daily average for the past 90 days.
The market’s recent rebound had further lifted the Topix’s
12-month forward price-to-book ratio to 0.85, from a four-year
low of 0.8 hit in the first week of August, data from Thomson
Reuters Datastream showed. That compared with U.S. S&P; 500’s
1.9 and STOXX Europe 600’s 1.36.
