May 30, 2012 / 3:27 AM / 6 years ago

Nikkei loses 1 pct; strong yen weighs

* Renesas bounces, up 29 pct; trader says oversold
    * Olympus up 5 pct on report of tie-up
    * Spain worries continue to depress sentiment

    By Sophie Knight	
    TOKYO, May 30 (Reuters) - Japan's Nikkei inched down on
Wednesday morning, with a firm yen against the euro pinching
exporters, although troubled chipmaker Renesas Electronics Corp
 staged a dramatic rebound and Olympus Corp leapt on a
reported tie-up.	
    The Nikkei share average slipped 1 percent to
8,571.90, while the broader Topix index fell 1.2 percent
to 718.22.	
    "At the end of the month window-dressing comes into play,
but today the buying is mostly just closing out positions," said
Masayuki Otani, chief market analyst at Securities Japan.	
    Softbank Corp put on a solid 2.4 percent and was
the top traded stock by turnover after Deutsche Securities
upgraded the telecommunication company's rating to "buy" from
"hold" and raised its target price to 2,810 yen from 2,570 yen,
saying it had an impressive subscriber growth rate.	
    "The market reacted well to signs that a Chinese stimulus
programme may be coming yesterday, but now that's priced in it's
back to worrying about the euro zone," said Hideyuki Ishiguro,
assistant manager of investment strategy at Okasan Securities.
"The market is tired of waiting for the Greek election, so the
focus is shifting to Spain." 	
    Exporters remained under pressure as the yen firmed to a
four-month high against the euro after Spain's borrowing costs
rose on Tuesday towards the 7 percent level that led other
countries to seek a bailout. TDK Corporation, a stock
with high exposure to Europe, dropped 3 percent. 	
    Renesas Electronics soared 28.9 percent, bouncing back after
the troubled chip maker's share price was slashed in half this
month and the company was forced to seek 100 billion yen ($1.3
billion) to pay for a proposed restructuring. The stock was the
biggest gainer after sliding 16.4 percent as the biggest loser
on Tuesday, hitting a record low.	
    "It has been oversold ... They're hoping to get some capital
injection, significantly lessening the downward pressure," a
dealer at a European brokerage said.  	
    Olympus Corp also jumped, gaining 5.1 percent to a
one-month high after the Asahi newspaper reported that it was
seeking a capital tie-up worth tens of billions of yen with
either Sony Corp or Panasonic Corp.
 	
     Sony fell 2 percent and Panasonic lost 3 percent on the
news they could be associated with scandal-ridden Olympus.	
    The Nikkei was out of "oversold" territory, with its 14-day
relative strength index at 30.7, but market analysts said it
would encounter strong resistance on the upside as most buying
was short-covering and buying on dips. 	
    "Usually it would find resistance at its 5-day moving
average (around 8,593.18), but today it's broken through that
without effort," said Otani of Securities Japan. "It's pretty
sluggish today, but the next milestone lies around 8,500." 	
    The Nikkei is down 16 percent from its year high of
10,255.15 on March 27 and has posted a weekly loss for eight
consecutive weeks, its worst run for 20 years, on a deepening
euro zone debt crisis and concerns about the slowing global
recovery.	
    Volume on the Topix index was light, at 37 percent of its
90-day average. 	
    "There won't be any reason for buying in earnest until the
euro zone calms down, but right now it's moving in an ominous
direction," Ishiguro of Okasan Securities said.

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