💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Nikkei rises 1.8 pct, lifted by resource stocks

Published 10/13/2010, 09:50 PM
Updated 10/13/2010, 09:52 PM
GC
-
HG
-
SI
-

* Risk-taking likely emerging, helping Japan stocks -analyst

* Yen strength likely to cap further climbs -analysts

* Nikkei's next target seen around 9,700-800

By Aiko Hayashi

TOKYO, Oct 14 (Reuters) - Japan's Nikkei rose 1.8 percent on Thursday, buoyed by a jump in resource stocks as dollar weakness fuelled a climb in commodity prices.

Robust earnings results from U.S. heavyweights such as JPMorgan Chase & Co and Intel Corp have bolstered investor confidence and helped to spur short-covering, analysts said, but worries about Japanese earnings due to the persistent strength in the yen will likely keep gains in check.

"Expectations of further easing by the United States have led to dollar weakness and thus to a rally in commodities. A so-called risk-taking money flow is emerging in the market," said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.

"The market also welcomed U.S. earnings that haven't been as poor as feared. But currency moves remain the top focus in the Tokyo market and the strong yen will likely cap gains, particularly in exporter shares."

The benchmark Nikkei was up 172.05 points at 9,575.56, after rising as much as 2 percent to 9,591.38.

The broader Topix gained 1.5 percent to 835.08.

In early Asian trade, the dollar changed hands at 81.58 yen, not far from a 15-year low of 81.37 yen hit on Monday, though caution remained that Japanese authorities could intervene the closer the greenback gets to its record low of 79.75 yen.

U.S. stocks rose about 1 percent as stronger-than-expected earnings and lingering U.S. dollar weakness increased demand for equities. But Dow components JPMorgan Chase & Co and Intel saw their shares slide after recent rallies, despite the lift to sentiment from their strong results.

On the charts, the Nikkei's next upward targets stand near its recent peaks: the first around 9,700 marked earlier this month, and then near 9,800 hit in July.

The Nikkei is expected to find strong support at the 38.2 percent retracement of its September-October rally and its 55-day moving average, both of which stand around 9,365.

Resource-related stocks jumped, with copper hitting a 27-month high and gold returning to record peaks.

Mitsui Mining and Smelting advanced 4.9 percent to 258 yen and Sumitomo Metal Mining rose 3.2 percent to 1,441 yen. Shares of JX Holdings, which owns Japan's top copper smelter Pan Pacific Copper, climbed 4.3 percent to 482 yen.

Yahoo Japan Corp shot up 5.3 percent to 30,300 yen after the Wall Street Journal reported several private equity firms, including Silver Lake Partners and Blackstone Group, are considering buying Yahoo Inc either by teaming up with AOL Inc or taking it private themselves. (Editing by Edmund Klamann)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.