Tokyo, Aug. 8 (Jiji Press)--After a brief slump below 13,000, the benchmark Nikkei average bounced back on the Tokyo Stock Exchange Friday, reflecting hopes that the market has already factored in Japanese firms' sluggish earnings prospects.
The 225-issue Nikkei average ended up 43.42 points at 13,168.41. The key market gauge lost 129.90 points on Thursday.
The TOPIX index of all first-section issues, an 18.46-point loser in the previous session, was up 1.12 points at 1,259.93.
The Nikkei average plunged as much as 162 points below 13,000 in early morning following an overnight dive on Wall Street, but it turned to positive territory in early afternoon, led by the strength of major export-oriented shares.
Brokers said the dollar's slight gain versus the yen in the afternoon was a factor that directly helped the market turn up but that the biggest reason behind the market's solid undertone was strong gains in shares of Toyota Motor.
Toyota jumped 5.5 pct even though the Japanese auto giant on Thursday reported a 38.9 pct year-on-year drop in April-June group operating profit.
"Since many parts makers of the Toyota group had revised down their earnings forecasts, investors were relieved to see Toyota maintain its earnings outlooks for the current fiscal year," said Yumi Nishimura, equity manager at Daiwa Securities SMBC Co.(MORE)Nikkei Recovers from Brief Slip below 13,000 as Earnings Fears Recede
Yutaka Miura, equity manager at Shinko Securities Co., said Toyota's performance indicates that selling driven by jitters about April-June earnings has mostly run its course as the Japanese quarterly earnings reporting season winds down.
"Now that the market has priced in most of the near-term negative factors, I expect the market's downside to stay solid for a while," Miura said.
"In the long run, however, uncertainties about the economy and fears of downward revisions of earnings projections would come back to haunt the market," he said, predicting the Tokyo market is unlikely to stage a long-term rally.
Looking ahead, brokers said the market may enter summer lethargy next week.
"Summer holidays and the Olympic Games are likely to keep investors' attention away from the market," said Teruhisa Ishikawa, equity manager at Mizuho Investors Securities Co. "Tokyo players are also cautious about making big bets right now because the U.S. market has been repeating major ups and downs."
Losing issues marginally outnumbered winners 834 to 763 on the TSE's first section, while 112 issues were flat.
Volume totaled 2,285 million shares against Thursday's 2,029 million shares.
Considering that turnover was boosted by heavy transactions linked to the day's settlement of August options contracts, trading was very slack, brokers said.(MORE)Nikkei Recovers from Brief Slip below 13,000 as Earnings Fears Recede
Honda, Mazda and Isuzu rose along with Toyota.
Chipmaking equipment makers Tokyo Electron and Advantest headed up after a favorable report by Citigroup boosted shares of U.S. chip giant Intel overnight.
Meanwhile, companies sensitive to global economic developments remained weak. These included shipping firms Nippon Yusen, Kawasaki Kisen and Mitsui O.S.K. Lines as well as steelmakers Nippon Steel and Sumitomo Metal Industries.
Banking groups Mitsubishi UFJ, Mizuho and Sumitomo Mitsui sank, as did brokerage houses Nomura and Daiwa, after news about a multibillion-dollar quarterly loss at American International Group Inc. battered U.S. counterparts overnight.
In index futures trading, the key September contract on the Nikkei average closed up 40 points at 13,170 on the Osaka Securities Exchange.END
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Story Source: Jiji Press English News Service
