TOKYO, Oct 26 (Reuters) – Japan’s Nikkei share average is
expected to rise on Friday, supported by expectations of
significant easing by the Bank of Japan, while investors appear
to have priced in cuts to profit forecasts in the current
earnings season.
Market players said the Nikkei was likely to trade between
9,000 and 9,150 after the benchmark hit a four-week closing high
of 9,055.20 on Thursday as hopes for BOJ action softened the yen
to a four-month low against the dollar, buoying exporters.
“The yen has gained a solid foothold above 80 versus the
dollar, so we’ll continue to see the positive effects of a
weaker yen,” said Kenichi Hirano, operating officer at Tachibana
Securities. “Expectations of the BOJ easing are running very
high – it’s markedly different to previous months.”
Overnight, Apple Inc and Amazon joined the
ranks of U.S. tech and internet firms reporting earnings that
fell short of expectations, causing their shares to fall in
extended-hours trading.
Just 36.3 percent of S&P; 500 companies have beaten revenue
expectations this season, compared with a historic average of 62
percent.
While earnings from Japanese firms have hardly been stellar
– 9 out of the 12 Nikkei companies reporting so far have
undershot expectations – disappointments have largely been
priced in, while the weaker yen has softened the fall for
companies with poor results.
Nikkei futures in Chicago closed at 9,075, up 5
points from the close in Osaka.
The Nikkei added 1.1 percent to 9,055.20 on Thursday,
breaking above its 5-day moving average at 9,007.43, but it
faced resistance at its 200-day moving average of 9,056.05.
> Wall St manages slim gain, Apple falls after results
> Dollar at 4-month high vs yen; euro down for 3rd day
> Prices drop on growth hopes after weak auction
> Gold rebounds above $1,700/oz on economic optimism
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STOCKS TO WATCH
-AEON CO
Aeon Co Ltd is to buy out Carrefour SA’s Malaysian
subsidiary for just over 20 billion yen ($250 million) to take
control of its 26 large supermarkets there, in addition to the
29 it already holds, according to the Nikkei business daily.
-ADVANTEST CORP
Advantest Corp lowered its operating profit forecast for the
year ending March 2013 after Thursday’s close to between 6
billion yen ($75 million) and 16 billion yen ($200 million),
down from a previous forecast of between 12 and 20 billion yen.
-CANON INC
Canon cut its full-year outlook and posted a
weaker-than-expected quarterly profit after sales were hit by
boycotts of Japanese products in China on the back of a
territorial dispute, adding to woes about slowing demand in
Europe.
-HITACHI CONSTRUCTION MACHINERY CO LTD
Hitachi cut its operating profit forecast for the year
ending March 2013 to 56 billion yen ($700 million), down from a
previous forecast of 72 billion yen, and cut its sales forecast
for the same period by nearly a tenth. An executive said that
demand for excavators in China is unlikely to recover before
March 2013.
