Nikkei scales 32-month high; Sharp shares down on Apple report

TOKYO Tue Jan 15, 2013 7:48am IST

Tokyo Stock Exchange employees work at the bourse in Tokyo December 17, 2012. REUTERS/Yuriko Nakao/Files

Tokyo Stock Exchange employees work at the bourse in Tokyo December 17, 2012.

Credit: Reuters/Yuriko Nakao/Files

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei share average climbed 1 percent to a 32-month high on Tuesday, driving the benchmark further into "overbought" territory, as persistent weakness in the yen boosts demand for exporters' shares.

The Nikkei rose 110.23 points to 10,911.80, setting its sights on the 11,000-mark, a level not seen since late April 2010. It rose 1.1 percent last week to log its ninth straight week of gains and its longest such winning run since 1988. Monday was a public holiday in Japan.

Tuesday's bidding took the benchmark Nikkei deeper into "overbought" territory, with its 14-day relative strength index at 80.05, way above the 70-mark which is deemed overbought and often signals a near-term correction.

"Short-term correction is getting more likely given that bullish sentiment ... has become more widespread. In terms of my positioning, I have trimmed down the exposure to stocks which have skyrocketed in the past two months," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.

The Nikkei has rallied 26 percent over the past two months, spurred by the weakness in the yen after Prime Minister Shinzo Abe called on the Bank of Japan to adopt aggressive policy to energise the ailing economy, including setting an inflation target of 2 percent.

Exporters led the index higher on Tuesday, including Suzuki Motor Corp (7269.T), Daikin Industries Ltd (6367.T), Honda Motor Co (7267.T), Olympus Corp (7733.T) and auto parts maker Denso Corp (6902.T), which were up between 1.2 and 7.5 percent.

Japanese automakers are aiming to shake off the lingering effects of natural disaster in 2011 and capitalise on the weakening yen and new products to increase sales in the United States, after a robust 2012.

The yen was quoted at 89.55 to the dollar on Tuesday after falling 0.4 percent to a 2-1/2-year low of 89.67 yen in the previous session, while the Japanese currency was traded at 119.83 to the euro.

Sharp Corp (6753.T), however, sagged as much as 7 percent after the Nikkei newspaper said on Monday that Apple Inc (AAPL.O) has slashed orders with suppliers of LCD panels for the iPhone 5 in the current quarter due to weak demand.

Other Apple suppliers in Japan also came under pressure, with Murata Manufacturing Co Ltd 6981.OS down 2.7 percent and Ibiden Co Ltd (4062.T) off 1.4 percent.

The broader Topix gained 1 percent to 908.03.

Japanese equities carry a 12-month forward price-to-earnings ratio of 13, ahead of the U.S. S&P 500's 12.9 and the pan-European STOXX Europe 600's 11.4, data from Thomson Reuters Datastream showed.

(Reporting by Dominic Lau; Editing by Stephen Coates)

FILED UNDER:

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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