* MOF data shows companies raised capex in Jan-March
* Yen takes a breather from overnight strength
TOKYO, June 1 Japan's Nikkei share average
started the month with gains on Thursday, buoyed by upbeat news
of Japanese companies' growing capital expenditure as well as
the dollar's ascent from overnight lows against the yen.
The Nikkei was up 1 percent at 19,854.27 at midday,
pushing toward the key resistance line of 20,000 points.
"I still think 20,000 is on the horizon sometime this year,
and it's just going to come down to the U.S. uncertainties,"
said Gavin Parry, managing director of Parry International
Trading in Hong Kong.
"The Japan Inc. earnings story is good - were actually
decent - and outlooks were rosy," he said, noting dollar/yen
levels had moved up from the level at which some of the outlooks
News out early on Thursday showing that companies picked up
the pace of their investment in plant and equipment in the
January-March quarter brightened sentiment toward corporate
The Ministry of Finance data showed capital expenditure by
manufacturers and non-manufacturers grew 1.0 percent and 6.3
percent respectively in the first quarter from a year earlier,
and corporate profits rose 26.6 percent.
The amount of recurring profits, at 20.1 trillion yen
($181.20 billion), was the biggest on record for a January-March
quarter, driven by brisk demand for cars and smart phones, an
MOF official said.
Japanese markets largely shrugged off a private survey that
showed China's manufacturing activity unexpectedly contracted in
May for the first time in 11 months.
The dollar steadied on Thursday, adding 0.2 percent on the
day to 110.96 yen after skidding to two-week lows against
its the yen overnight, with this month's Federal Reserve meeting
San Francisco Fed President John C. Williams said on
Thursday he sees three interest rate increases this year as his
baseline scenario, but would view four rate increases as
appropriate if the U.S. economy were to get an unexpected boost.
Futures markets are pricing in a roughly 90 percent chance
the Federal Reserve will raise rates by 25 basis points this
month, though some investors anxiously await this Friday's
nonfarm payrolls report for continued evidence of labour market
A Reuters poll showed economists forecasting 185,000 new
jobs in May.
Caution reigned on Wall Street on Wednesday, which some had
believed might carry over into Asian trade. Major indexes edged
slightly lower after financial heavyweights JPMorgan and
Bank of America warned of revenue weakness.
"Many thought investors would remain quiet before the U.S.
employment stats were released, but the Tokyo market has
rebounded and shows strength even with a slight upward movement
of the yen," said Hiroki Allen, chief representative of
Superfund Japan in Tokyo.
Shares of beleaguered electronics giant Toshiba Corp
skidded 2.1 percent, after it moved some of the assets
of its memory chip unit back to the parent company in a bid to
ward off Western Digital Corp's legal claim that the
Japanese conglomerate cannot sell the unit without the U.S.
Canon Inc's shares were 3 percent higher, after the
camera and printer manufacturer said it will buy back up to 1.3
percent of its own shares worth 50 billion yen ($450.98
Shares of Scroll Corp rose 4.1 percent, after the
internet retailer reported its acquisition of KINARI, a company
dealing with organic cosmetics, from Shiseido Co, which
gained 1.9 percent.
Park24's shares slumped 6.1 percent, after the
parking lot operator reported a 10.2 pct year-on-year drop in
operating profit for the 6 months through April 2017, due to an
increase in capital spending
The broader Topix added 1 percent to 1,583.69, and
the JPX-Nikkei Index 400 was 1.1 percent higher at
(Reporting by Tokyo markets team; Editing by Eric Meijer)