Nikkei bounces off 1-month low, buoyed by strong U.S. retail sales

Dominic Lau
Tuesday, 14 Jan 2014 | 7:59 PM ET

* Dec U.S. retail sales ease concerns about U.S. growth

* Toshiba climbs to 5-1/2 month high after UK nuclear deal

TOKYO, Jan 15 (Reuters) - Tokyo's Nikkei stock average rebounded from a one-month low on Wednesday as a robust U.S. retail sales report helped ease concerns about the pace of growth in the world's largest economy - one of Japan's top trading partners. The upbeat U.S. data also lifted the dollar from a four-week low against the yen, giving currency-sensitive Japanese exporters, such as Toyota Motor Corp and Sony Corp , a fillip. A softer yen strengthens the competitiveness of Japanese exporters abroad and their dollar earnings when repatriated. The Nikkei was up 1.4 percent at 15,638.95 in mid-morning trade after tumbling 3.1 percent on Tuesday, its biggest one-day decline in five months, while the yen was quoted at 104.135 per dollar, having fallen 1.2 percent overnight. "Programme (trades) are a bit more active today. On the cash side, we are seeing a mix of long-only and hedge funds," a Tokyo-based trader at a European bank said. "People are back to relatively flattish position. They have more bullets behind, so any of kind of dips they would start buying again." U.S. stocks rose on Tuesday, erasing much of the previous session's steep drop. The December U.S. retail sales data followed Friday's nonfarm payroll report, which came in sharply below expectations, raising concerns about the pace of the U.S. recovery. The benchmark Nikkei has got off to a slow start this year after rocketing 57 percent in 2013, energised by Tokyo's massive fiscal and monetary stimulus to revive the world's third-largest economy. Among exporters that rebounded from Tuesday's selloff were Toyota, Mazda Motor Corp, Fuji Heavy Industries and Panasonic Corp, up between 1 and 2.7 percent.

EXPENSIVE SOFTBANK? Mobile operator SoftBank Corp, the second top performer after Mazda in 2013, was 25 percent more pricey than its intrinsic value of 6,600 yen, Thomson Reuters StarMine data showed. SoftBank was up 1 percent on Wednesday morning and the third-most traded on the main board. Toshiba Corp, the second-most traded, climbed 4.3 percent after it had agreed to buy 60 percent of the NuGen UK nuclear joint venture between GDF Suez and Spain's Iberdrola for about $168 million. Suntory Beverage & Food Co Ltd eased 0.5 percent after gaining 0.3 percent in the previous session after parent Suntory Holdings said on Monday it would buy U.S. spirits company Beam Inc for $13.6 billion. The broader Topix index advanced 1.3 percent to 1,285.08, with volume at 20 percent of full daily average for the past 90 trading days. In terms of valuation, Japanese equities carried a 12-month forward price-to-book ratio of 1.28, a level not seen since late May and much cheaper than the U.S. S&P 500's 2.4 and the STOXX Europe 600's 1.63, Thomson Reuters Datastream data showed. The JPX-Nikkei Index 400, a new gauge comprised of firms with high return on equity and strong corporate governance to appeal to investors which started trading on Jan. 6, gained 1.3 percent to 11,600.12.

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