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RPT-Nikkei seen higher as Wall St jumps, euro steadies

Published 12/01/2010, 06:30 PM
Updated 12/01/2010, 06:32 PM
USD/JPY
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(Repeats to fix formatting of table)

TOKYO, Dec 2 (Reuters) - Japan's Nikkei average is expected to jump on Thursday, moving toward a fresh five-month high, after Wall Street indexes posted their biggest gains in three months on talk of bold steps to resolve the EU's debt crisis.

The Nikkei could test the current five-month intraday high at 10,157.97 after both the U.S. shares and the euro rallied on Wednesday as speculation grew that the European Central Bank would step up its purchases of government debt.

Nikkei futures in Chicago closed at 10,170.00, 1.7 percent above the Osaka close.

"Exporters will likely lead the advance and the Nikkei will likely post big gains today after the rally on Wall Street," said Hiroichi Nishi, general manager at Nikko Cordial Securities.

The benchmark Nikkei is expected to move in a range of 10,050 to 10,200, traders said.

Uncertainties over the euro zone and tightening steps in China had kept investors in Tokyo on the sidelines on Wednesday, with the Nikkei edging up 0.5 percent and market players saying they would look to Chinese equities and U.S. economic data for direction.

The gains on Wall Street were "the sort of clear sign investors in Japan waited for yesterday," said Nishi, adding that both positive U.S. private-sector employment data on Wednesday and a weaker yen against the dollar would also bolster Tokyo shares.

The benchmark Nikkei rallied 8 percent in November, its best monthly performance since March, with foreigners shifting funds back to lagging Tokyo equities after U.S. monetary easing lifted expectations of more liquidity in financial markets.

The Nikkei's immediate support lies at the closely watched 200-day moving average, now at 9,911.59. ----------------------MARKET SNAPSHOT @ 2158 GMT ------------

LAST PCT CHG NET CHG S&P 500 1206.07 2.16% 25.520 USD/JPY 84.17 -0.04% -0.030 10-YR US TSY YLD 2.9661 -- 0.169 SPOT GOLD 1387.29 0.00% -0.060 US CRUDE 86.81 3.21% 2.700 DOW JONES 11255.78 2.27% 249.76 ------------------------------------------------------------- > Wall St jumps as euro panic eases, recovery steady > Euro snaps three-day drop but investors cautious > Bonds skid on data, Europe; 10-yr yield tests 3 pct > Gold rises for third day on eurozone debt fears > Oil gains 3 pct on positive U.S., China data

STOCKS TO WATCH

-- Tokyo Electron Ltd

Tokyo Electron's capital spending in the business year to March will likely triple to 45 billion yen ($535 million), exceeding projected depreciation charges for the first time in three years, the Nikkei business daily reported.

-- Automakers

U.S. auto sales rose 17 percent in November from a year earlier, a stronger-than-expected gain that pointed to a slow but steady return in consumer demand from the depressed levels of a year ago.

-- Kobe Steel Ltd

Kobe Steel is in the final stage of talks with U.S. Steel Corp to add a $480 million auto sheet steel line at their joint venture in Ohio, eyeing growing demand for lightweight steel used in fuel-efficient cars.

-- Mitsubishi Electric Corp

Mitsubishi Electric's factory automation business is showing no sign of slowing down, helped by healthy demand for smartphones, the company's president said on Wednesday.

-- Toyota Motor Corp

Toyota, the world's biggest carmaker, said on Wednesday it expected sales in India to almost double next year as it launches a new model in one of the fastest-growing auto markets in the world. ($1=84.17 Yen) (Reporting by Antoni Slodkowski; Editing by Michael Watson)

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