Nikkei set to trade in range, earnings eyed
TOKYO, Jan 30 (Reuters) - Japan's Nikkei share average is set to trade in a 200 point range on Wednesday with investors likely to stay on the sidelines seeking more trading cues from local earnings, and the weak yen trend is likely to support the market above 10,800. Market participants said the Nikkei was likely to trade between 10,800 and 11,000 on Wednesday after ending up 0.4 percent to close at 10,866.72 the previous day. The Nikkei is 1.2 percent below a 32-month high of 11,002.86 reached on Monday. Analysts said that investors are focused on quarterly earnings for the Oct-Dec period, and newsflow related to prospects for the fiscal year ending March 2014 could be a catalyst for prices to move out of th expected range. "Investors have shifted their focus to prospects for the full-year (ending this March) as well as next year (through March 2014)," said Hiroichi Nishi, an assistant general manager of equity investment at SMBC Nikko Securities, adding that stocks like Komatsu Ltd may face a sell-off after cutting its operating profit forecast by 12 percent to 230 billion yen ($2.5 billion) for the year to end-March. "But even if some earnings disappoint the market, an impact on the overall market should be limited because investors will probably buy shares on the dips as fundamental sentiment is being supported by Abenomics," Nishi said. Separately, traders said Softbank Corp may outperform after its ADR rose overnight as Dish Network Corp has decided against filing to block Sprint Nextel Corp's proposed deal with Softbank, at least for now.
Investors have been piling into the Japanese market in the hope that "Abenomics", prime minister Shinzo Abe's brand of economic policy involving aggressive monetary easing and a weaker yen, will boost such stocks as exporters and financials. The Nikkei has risen about 25 percent since mid-November, when Abe, then a candidate for leader of the opposition and now Prime Minister, began calling for aggressive monetary easing. Nikkei futures in Chicago closed at 10,905, up 0.1 percent from the close in Osaka of 10,890. The broader Topix gained 0.8 percent to 920.76 on Tuesday.
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--Softbank Corp The Justice Department and the Department of Homeland Security are examining the proposed takeover of Sprint Nextel by Japan's Softbank for national security and other issues, and have asked the U.S. telecommunications regulator to defer any action on the deal. Separately, the Nikkei said that Softbank likely have generated a group operating profit of about 590 billion yen ($6.51 billion)for nine months ended December.
--Komatsu Ltd Komatsu, the world's second-biggest maker of construction machinery, cut its annual profit for a second time as demand for mining equipment in Indonesia tumbled on the back of steep declines in thermal coal prices.
--Idemitsu Kosan Co Idemitsu, Japan's No. 3 oil refiner, said on Tuesday it will form a partnership with Canada's AltaGas Ltd to export liquefied natural gas and liquefied petroleum gas to Asia, starting as early as 2017.
--Toshiba Corp Toshiba's U.S. unit Westinghouse expects Japan to start gradually begin putting much of its nuclear power plant fleet back into operation after dealing with safety issues following the Fukushima disaster.
--Mitsubishi Heavy Industries Ltd Mitsubishi Heavy has not been contacted by Boeing Co on any changes in Boeing's production plan of the 787 Dreamliner, an executive of the Japanese firm told reporters on Tuesday.
--Yahoo Japan Inc Yahoo Japan said on Tuesday that it plans buy back up to 20 billion yen ($220 million) of its own shares, or 1.4 percent of its issued stock.