Nikkei rises for 6th straight day, exporters weigh

Japanese stocks rose Monday, with the key Nikkei stock index edging up 0.14 percent to book its sixth straight day of gains as the market's underlying optimism and bargain hunting neutralized geopolitical problems in the Middle East and Chinese banks' policy tightening.


Brokers said that both Chinese and local markets on Monday responded somewhat nonchalantly to The People's Bank of China's announcement Friday that it would increase the bank reserve requirement beginning Feb. 24.


The hike, the second this year and the eighth since the beginning of last year, is the latest move to soak up liquidity and check inflation, strategists said and will effectively mean that major banks will have to set aside 19.5 percent of their reserves while small and medium-sized banks will have to keep 16 percent of their deposits in reserves.


China's central bank said on Jan. 30 that keeping overall price levels under control by adopting a "prudent" monetary policy would be its top priority this year.


Market analysts said that there was a sense of relief that the news didn't send Shanghai shares lower and this buoyed the mood in Tokyo on the first trading day of the week.


"Shanghai shares moved out of negative territory with the limited impact of China's move, so it was positive for the market, " said Yumi Nishimura, senior market analyst at Daiwa Securities Capital Markets Co.


"Despite some concern about an overbought market, selling pressure was not strong," Nishimura said, adding that underlying sentiment remained supported by hopes for economic recovery and corporate earnings.


"The Nikkei got some support in the afternoon as investors bought on dips and after seeing that Chinese markets took in stride the latest move to tighten policy in the form of banks' required reserves," added Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.


The 225-issue Nikkei Stock Average gained 14.73 points from Friday to 10,857.53, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 1.03 points, or 0. 11 percent, to 974.63.


While some China-linked issues did retreat Monday with Komatsu slipping 0.4 percent to 2,551 yen and Hitachi Construction Machinery shedding 0.9 percent to 2,086 yen, analysts said that tensions in the Middle East however are having a more immediate affect on market players' undertakings, as oil production in the area could be affected on the back of rising prices.


In addition, brokers said that some investors were reluctant to take up firm positions as U.S. markets are closed Monday for a national holiday and the Middle East crisis may spread extensively.


"Political risk is increasingly becoming a key factor in the market," said Masayoshi Okamoto, equity strategist at Jujiya Securities Co.


"We have political uncertainty in Japan, of course, but more attention is being devoted to the situation in the Middle East and its impact on China, and how global stocks will respond," Okamoto said.


As oil hit 91.70 U.S. dollars a barrel in New York, due to rising violence in oil-rich Libya sparking fears political unrest will spread in the Middle East and Northern African regions, Inpex advanced 1.7 percent to 597,000 yen and Japan Petroleum Exploration Co., gained 2.7 percent to 4,005 yen.


A stronger yen sparked profit-taking in early trade and Olympus dropped two percent to 2,416 yen and TDK failed to make up lost ground, retreating almost two percent to 5,690 yen. Mazda Motor also closed in negative territory, skidding down 1.4 percent to 219 yen.


Also battling a strong yen, Advantest Corp. dropped 0.4 percent to 1,740 yen, Hitachi Ltd. lost 1.2 percent to 497 yen and Tokyo Electron fell 2.1 percent to 5,540 yen.


But there were individual winners, notably telecommunications firm KDDI who climbed 1.9 percent to 547,000 yen, following a report in the Nikkei business daily saying the company will release Japan's first WiMAX-compatible smartphone in April, capable of sending and receiving data five times faster than regular cell phones.


Softbank, the sole network provider of Apple Inc.'s iPhone in Japan, leapt 5.6 percent to 3,420 yen, following news the firm may list itself on the U.S. stock market this year.


Trading volume on Monday fell to 2.08 billion shares on the Tokyo Exchange's First Section, down from Friday's volume of 2.15 billion shares, with advancing issues outnumbering declining ones by 768 to 734.
(Source:http://news.xinhuanet.com)