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Tokyo Stocks Up, Property and Retail Lead

Yahoo! News - Tokyo Stocks Up, Property and Retail Lead

By Mariko Katsumura

TOKYO (Reuters) - Japanese stocks rose by midsession on Monday as growing confidence over the country's economic outlook lifted retailers and real estate firms such as Mitsubishi Estate Co. that rely more on domestic business.

The market's overall gains were capped, however, as exporters including Canon Inc. fell on the dollar's weakness against the yen.

The Nikkei average rose 81.43 points or 0.71 percent to 11,519.82 by the midsession break. The broader TOPIX index put on 0.53 percent to 1,151.78.

Both indices extended gains made on Friday after government data showed Japan's core private-sector machinery orders, a gauge of capital spending trends, surged a much bigger-than-expected 19.9 percent in November from a month earlier.

"The data came in at a good time as investors, especially foreign players, were seeking an outcome good enough to convince them that Japan's deflation is coming closer to an end ... although we can't be too optimistic with just one piece of data," said Yasuo Yabe, director of sales at Meiwa Securities.

"Considering the dollar's weaker trend, buyers will likely target domestic stocks that are less affected by currency risks."

Mitsubishi Estate, Japan's second-largest real estate firm, climbed 3.78 percent to 1,289 yen.

It had jumped 3.8 percent on Friday after an industry report showed the office vacancy rate in central Tokyo fell to 6.1 percent in December from 6.4 percent in November, the fifth straight month of improvement.

The real estate sector's subindex jumped 2.76 percent, making it the biggest gainer sector among 33 sectors.

Aeon Co., Japan's biggest retailer by sales, jumped 3.33 percent to 1,831 yen and smaller rival Ito-Yokado Co. added 2.13 percent to 4,310 yen.

But exporters fell after the dollar weakened to five-year low of 101.78 yen in New York on Friday. It was trading most recently at 102.08 yen.

Office machine maker Canon, which generates about three quarters of its sales overseas, fell 0.92 percent to 5,380 yen and. Toyota Motor Corp. (news - web sites) gave up 0.24 percent to 4,140 yen.

Tokyo Electron Ltd, the world's second-largest maker of chip equipment, climbed 2.45 percent to 6,270 yen.

UBS analyst Yoshitsugu Yamamoto said in a report dated Jan. 14 that he expected chip equipment stocks, including Tokyo Electron, to be firm in the January-March period, helped by strong capital spending and by healthy sales outlooks from Intel Corp. and Samsung Electronics Co. Ltd.

A 14.2 percent decline in sales orders for October-December period from the previous quarter, which Tokyo Electron posted on Friday, came in in line with the market's expectations, also soothing investors' worries about a sharp fall in chip firms' sales, analysts said.

"Their earnings momentum has not yet totally slowed. I still see Tokyo Electron's stock price as having more upside room before its earnings announcement (due on Feb. 10)," said Kazuhiro Takahashi, general manager at equity planning and administration department at Daiwa Securities SMBC.

Trade was active, although it slipped from Friday morning levels with 896.1 million shares changing hands compared with 932.7 million.

Advancers dominated decliners 1,027 to 415.

January 16, 2005 at 09:58 PM in Japan | Permalink | Top of page | Blog Home