Japan's Nikkei set to rise on China PMI, weaker yen

Mon Dec 3, 2012 4:51am IST

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TOKYO, Dec 3 (Reuters) - Japan's Nikkei average is expected
to open higher on Monday, extending gains from a seven-month
closing high hit in the previous session, as exporters are
buoyed by a weaker yen and improved Chinese manufacturing data.
    China's official manufacturing purchasing managers' index
rose to a seven-month high of 50.6 in November from 50.2 in
October, the National Bureau of Statistics said on Saturday.
    The Nikkei was likely to trade between 9,450 and
9,550, strategists said, while Nikkei futures in Chicago closed at 9,495 on Friday, up 0.5 percent from the
Osaka close of 9,450.
    The yen has fallen on speculation that the Bank of Japan
will be pushed to adopt aggressive policy action under a likely
new government after a Dec. 16 election. The currency was traded
at 82.42 yen to the dollar on Monday after falling as low as
82.75 yen on Friday, near its 7-1/2-month low of 82.84 touched
on Nov. 22. 
    "Japanese valuations are still favourable, but this week's
main focus will be the American economy and developments in the
ongoing (fiscal) talks there," said Hiroichi Nishi, equity
general manager at SMBC Nikko Securities.
    Japanese equities carry a 12-month forward price-to-book
ratio of 0.9, much cheaper than the U.S. S&P 500's 1.9
and the pan-European STOXX Europe 600's 1.4, data from
Thomson Reuters Datastream showed.
    On Friday, the Nikkei rose 0.5 percent to 9,446.01 to a
seven-month closing high, and rose 5.8 percent in November to
log its best monthly performance since February. The broader
Topix added 0.3 percent to 781.46.
    The benchmark Nikkei is up 11.7 percent this year, slightly
behind a 12.6 percent rise in the S&P 500 and a 12.8 percent
gain in the STOXX Europe 600.
        
> Wall St ends flat as 'fiscal cliff' focus lingers         
> Euro subdued, China data cheers Aussie dollar           
> Treasuries flat as profit-taking offsets month-end buying 
> Gold down for day and month on U.S. fiscal worries      
> Oil posts first monthly rise since August                
    
    STOCKS TO WATCH
    --SHARP CORP 
    Sharp has agreed to sell three of its television assembly
factories outside Japan to Hon Hai Precision Industry,
a deal which would total about 55 billion yen ($667 million),
the Sankei newspaper reported on Saturday. 
    Separately, semiconductor equipment maker Tokyo Electron Ltd
 said on Friday it has dissolved a joint venture with
Sharp to develop equipment to make thin-film silicon solar power
cells, amid weak demand for the technology. The venture was set
up in February 2008. 
    --TOYOTA MOTOR CORP 
    Toyota is still struggling to revive sales in China, part of
a broader slump to hit Japanese car firms after a diplomatic row
between the countries. 
    --FAST RETAILING 
    The operator of casual fashion chain Uniqlo said on Friday
it will buy an 80.1 percent stake in U.S. denim maker J Brand
Holdings from Star Avenue Capital and J Brand managers for $290
million to gain more brand clout in the United States.
 
    --U-SHIN LTD 
    French car parts equipment maker Valeo said on
Friday it had agreed to sell its unit which makes locks, handles
and similar products to U-Shin for an enterprise value of 223
million euros ($289 million).
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