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Nikkei set to advance on yen, U.S. earnings optimism

Published 07/15/2009, 07:44 PM
Updated 07/15/2009, 07:48 PM
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TOKYO, July 16 (Reuters) - Japan's Nikkei average is likely to climb on Thursday, with exporters seen higher on a weaker yen and after results from Intel Corp lifted hopes for a rebound in technology spending and boosted Wall Street.

Toyota Motor Corp and Mazda Motor Corp are in focus after the Nikkei business daily said Toyota plans to supply core components for hybrid vehicles to smaller rival Mazda.

Nikkei futures traded in Chicago jumped 3.1 percent from their Osaka close of 9,290, pointing to a higher start.

"The market's expected gains are likely to be led by technology shares, thanks to the weakening yen," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

Shares of Japanese chip-related stocks such as Advantest Corp had made some modest gains on Wednesday in the wake of Intel's results, but the benchmark Nikkei ended the day flat as investors grew cautious ahead of more earnings results.

"Japanese exporters have likely set their currency assumptions at around 94.85 yen against the dollar and if it nears that level, earnings hopes for those companies will be further heightened," Nishi said.

In early Asia trade, the dollar was flat and moving around 94.19 yen.

Market players expect the Nikkei average to trade between 9,350 and 9,550 on Thursday. It ended the previous day flat at 9,269.25.

On Wednesday, the Standard & Poor's 500 Index gained 3 percent. Intel's quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia. > S&P has best 3 days since March on earnings optimism > Dollar falls as strong earnings boost risk appetite > Prices fall on hopes of economic recovery > Gold rises above $940 on inflation fear, weak dollar > Oil settles 3 pct higher after inventory fall STOCKS TO WATCH

-- Canon Inc

Canon will likely post an operating profit of 30 billion yen ($318.5 million) for the April-June quarter, down 81 percent from a year earlier but up 50 percent from the previous quarter, the Nikkei business daily reported on Thursday.

Canon enjoyed growing sales of high-end digital cameras, cut costs and benefitted from a weaker-than-expected yen. But it suffered from sluggish office equipment sales and high-margin office supplies, the Nikkei said. -- Sumitomo Electric Industries Ltd

Sumitomo Electric has developed the world's first semiconductor laser that generates green light on its own without having to convert light to green from another color, the Nikkei business daily reported on Thursday.

Sumitomo Electric believes the semiconductor laser can be used to develop TVs with higher-quality pictures than existing LCD and plasma sets. It also sees the potential for use in palm-sized projectors, the Nikkei said.

-- Nippon Yusen KK, Mitsui O.S.K. Lines

Shipping firm Nippon Yusen likely suffered a roughly 20 billion yen ($212.3 million) pretax loss for the April-June quarter, while Mitsui O.S.K. will likely book a 5-10 billion yen loss, underlining a continued earnings slump for major marine transport companies, the Nikkei business daily said.

-- JFE Holdings

JFE Steel Corp will probably not restart its two inactive blast furnaces this year because the economy is still in bad shape, the head of the JFE Holdings unit said in an interview with the Nikkei business daily. ($1=94.20 Yen) (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

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