Nikkei edges down on poor U.S. data; Sharp up on Qualcomm deal

Tue Dec 4, 2012 7:28am IST

Related Topics

* Nikkei finds support at 9,400 - analyst
    * Sharp up more than 2 pct on Qualcomm deal
    * Paper companies drop on Merrill rating cuts

    By Ayai Tomisawa
    TOKYO, Dec 4 (Reuters) - Japan's Nikkei share average edged
down on Tuesday, trimming gains from a seven-month closing high
in the previous session as weak U.S. economic data triggered
profit-taking on exporters.
    The Nikkei was down 0.3 percent at 9,432.88, moving
further away from Monday's peak when it pierced the
psychologically important 9,500 resistance line for the first
time since April 27.
    Analysts said investors were wary of looming uncertainty
over the U.S. economy, which is key to the fortunes of Japan's
exporters, many of which rely on consumption in the world's
biggest economy.
    Manufacturing activity in the United States surprisingly
contracted in November, hitting its lowest level in more than
three years, while there has been no resolution to the country's
so-called fiscal cliff.  
    Canon Inc dropped 1.1 percent, Nikon Corp 
shed 1.9 percent and Toyota Motor Corp fell 0.1
percent.
    "Investors are cautious about the market's sharp rise in the
past few weeks, and as soon as the Nikkei hit the 9,500-mark,
trading has slowed down. Investors started taking a wait-and-see
mode," said Hiroichi Nishi, general manager at SMBC Nikko
Securities.
    The Nikkei should find support at 9,400 for Tuesday, he
said.
    During the past 2-1/2 weeks, the benchmark has rallied 9.2
percent, led by exporters, as the yen has fallen on speculation
the Bank of Japan will be pushed to adopt aggressive policy
action after the Dec. 16 election. A weaker yen lifts the value
of exporters' overseas incomes when repatriated.
    The leader of the main opposition Liberal Democratic Party,
Shinzo Abe, has been calling for the Bank of Japan to take
bolder action, including setting a 2 percent inflation target
and embarking on "unlimited easing". The LDP is expected to win
the most seats and form the government after the election.
    "Such positive news for the currency has been priced into
the current market," said Kenichi Hirano, a strategist at
Tachibana Securities. "Foreign investors will likely hold
exporters at least until the election."
    The currency last traded at 82.06 yen to the dollar, down
from its 7-1/2-month low of 82.84 touched on Nov. 22 but still
above the 82 yen threshold. A fall below this level could
trigger selling in the equities market, analysts have said.
    Bucking overall market weakness, struggling display panel
maker Sharp Corp gained as much as 2.9 percent to 177
yen in early trade after two sources familiar with the matter
said it and U.S. chipmaker Qualcomm Inc have agreed to
jointly develop next-generation displays. 
    Paper makers lost ground, with Hokuetsu Kishu Paper Co
, Oji Holdings Corp and Nippon Paper Group Inc
 falling between 2.8-3.8 percent after Bank Of America
Merrill Lynch cut their ratings.
    The broader Topix was flat at 781.81.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage