Nikkei inches up, short-covering run its course before U.S. result
* Investors stay on sidelines before U.S. result * Nissan surges on hopes for growth in North America By Ayai Tomisawa TOKYO, Nov 7 (Reuters) - Japan's Nikkei share average inched up on Wednesday on short-covering helped by gains in U.S. stocks, but the index is expected to hold a tight band as investors await the result of the U.S. presidential election. Traders said that in early trade, investors covered their short positions from early this week encouraged by a rise in U.S. stocks as investors looked forward to definitive U.S. election results. They added that the market is looking forward to a U.S. leader who can act decisively to avert the legislated "fiscal cliff" of spending cuts and tax hikes. The Nikkei was up 0.1 percent at 8,981.66 after trading above the 9,000 mark earlier. The broader Topix also rose 0.2 percent, to 746.03. "Short-term buying has run its course as investors quickly stayed on the sidelines," said Fujio Ando, senior managing director at Chibagin Asset Management. "Fundamentally, nothing has changed from the previous days. Japanese corporate earnings have disappointed the market, and the market lacks a trading cue besides the U.S. election for now." Democrat President Barack Obama and Republican challenger Mitt Romney are in a tight race as vote counts started in a few states. Obama and Romney have been neck-and-neck since their first debate in early October.. "All eyes are on the outcome of the election, so once the market rises in early trade, it will probably stay in a narrow range," said Kenichi Hirano, a strategist at Tachibana Securities, adding that the Nikkei may stay between 8,950-9,100 on Wednesday. Nissan Motor Co surged 4.3 percent to 706 yen on expectations of strong growth in sales in North America despite cutting its full-year operating profit forecast below market expectations. Nomura Securities lifted its price target on the automaker to 880 yen from 830 yen and reiterated its 'buy' rating. "We view the downward revision to 13/3 (March 2013) operating profit guidance of 125 billion yen as negative in that it exceeded our expectations for a 50 billion downward revision, but signs of earnings improvement in North America were already evident in July-September," Nomura said in a note. DeNA Co Ltd climbed 3.6 percent to 2,688 yen, hitting its highest level in six weeks after the social gaming company's first-half operating profit beat its own guidance. The benchmark Nikkei is up 6.1 percent this year, trailing a 13.6 percent rise in the U.S. S&P 500 and a 12.4 percent gain in the pan-European STOXX Europe 600 index.
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