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Nikkei up but yen's rise limits gain; eyes on G20

Published 10/21/2010, 11:24 PM
Updated 10/21/2010, 11:28 PM

* Market thin as investors nervous before G20 meet outcome

* Further stock gains blocked as yen hovers near 15-yr high

* Support at 13-week moving average at 9,383

By Aiko Hayashi and Chikafumi Hodo

TOKYO, Oct 22 (Reuters) - Japan's Nikkei average rose 0.4 percent on Friday in a rebound after two days of losses, but investors were wary of pushing the market higher before seeing the outcome of a Group of 20 meeting and with the yen hovering near a 15-year high on the dollar.

G20 finance officials started their formal meetings on Friday with nations from the developing world and Japan dismissing U.S. proposals to set limits on current account balances in an effort to defuse tensions over currencies.

"The focus from now on will be how the currency markets move after the G20 meeting, and investors want to wait and see what happens," said Koichi Nosaka, a market analyst at Securities Japan, Inc.

"But media reports about strong first-half earnings prospects for individual companies are lending support to investor confidence, though worries about second-half earnings remain."

The benchmark Nikkei finished the morning session up 0.4 percent at 9,410.71, rebounding after marking its lowest close in three weeks on Thursday.

The the broader Topix advanced 0.4 percent to 823.65.

The yen edged up to 81.20 against the dollar, still close to a 15-year high of 80.84 hit on EBS on Wednesday.

Analysts were watching to see if the Nikkei manages to end the week above its 13-week moving average, now at 9,383, which has served as solid support since September.

Resistance looms at its 26-week moving average, now at 9,630, which has held down the Nikkei for about five months.

Shares of Sumitomo Mitsui Financial Group gained 1.7 percent to 2,413 yen after Japan's No. 3 bank said it plans to list its shares on the New York Stock Exchange through American Depositary Receipts (ADRs) on Nov. 1, joining rivals as it steps up its expansion overseas.

Shares of Hitachi Ltd jumped 2.3 percent to 355 yen after the Nikkei business daily said that Japan's biggest electronics conglomerate was set to report an operating profit for April-September of more than 200 billion yen, beating its forecast of 170 billion yen.

Hitachi's earnings were supported by strong economic growth in emerging markets, resulting in higher demand for items such as digital consumer electronics, the paper said. (Additional reporting by Antoni Slodkowski)

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