Japan's Nikkei inches up, helped by China easing

TOKYO Mon May 14, 2012 1:37pm IST

The graphs of various market indices are displayed on an electronic board outside a brokerage in Tokyo February 15, 2012. REUTERS/Yuriko Nakao/Files

The graphs of various market indices are displayed on an electronic board outside a brokerage in Tokyo February 15, 2012.

Credit: Reuters/Yuriko Nakao/Files

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TOKYO (Reuters) - Japan's Nikkei share average inched higher on Monday to end a three-day losing streak as China's monetary easing countered unease ahead of Greece's last-ditch attempt to form a coalition government later in the day.

Gains in Kansai Electric Power Co (9503.T), up 5.6 percent after a local town assembly agreed to support the restart of two offline nuclear reactors, also helped the index to stay in positive territory.

The Nikkei closed 0.2 percent higher at 8,973.84, holding below the psychological key 9,000-mark but above technical support at 8,945, the 61.8 percent retracement of its rally from November to March.

The benchmark has lost 12.5 percent since hitting a one-year peak on March 27 on concerns over a slowing global growth and the intensifying euro zone sovereign debt crisis.

"The Chinese news over the weekend was positive ... but we have a sell-off in autos," a trader at a European brokerage said, attributing the dip in autos largely to broader economic concerns.

China's central bank cut the amount of cash that banks must hold as reserves on Saturday to bolster its flagging economy, offsetting Greece's struggle to form a government.

"It feels like many markets are treading air, just before the edge of a cliff. But at the same time, if you assume markets understand the risks, it feels surprisingly strong," said Stefan Worral, director of equity cash sales at Credit Suisse in Tokyo.

Nissan Motor Co (7201.T) dropped 2 percent, its forecast of a 28 percent rise in operating profit failing to impress investors. Honda Motor Co (7267.T) eased 0.8 percent and Toyota Motor Corp (7203.T) dipped 0.2 percent.

Takeda Pharmaceutical Co Ltd (4502.T) shed 3.2 percent after losing as much as 5.2 percent to hit a four-month low, its operating profit forecast of 160 billion yen coming in below market expectations.

Torishima Pump Mfg Co Ltd (6363.T) sagged 6.3 percent, extending losses in the previous two sessions after the company's 2012/13 operating profit forecast came in weaker than the market had predicted.

Japanese companies appeared to have been conservative in their earnings guidance for the current business year.

More than 60 percent of the 122 Nikkei companies that have reported January-March earnings have beaten or met market expectations, data from Thomson Reuters StarMine showed.

The broader Topix .TOPX index slipped 0.2 percent to 756.68. Nearly 1.66 billion shares changed hands on the main board, down from Friday's 2 billion shares and last week's average of 1.82 billion.

Consumer electronics makers Sony Corp (6758.T) and Panasonic Corp (6752.T) gained 1.7 and 1.4 percent, respectively, after both hit their lowest close in 32 years on Friday.

After the market close on Friday, Panasonic reported a record loss on slumping sales of flat panel TVs but promised a return to profit this year under a turnaround plan.

Sony also posted a record annual loss on Thursday but forecast a first profit in five years as it looks to halve losses at its ailing TV business.

(Additional reporting by Sophie Knight, Editing by Jonathan Thatcher)

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