Nikkei steady ahead of BOJ outcome; Tokyo Steel jumps

Dominic Lau
Tuesday, 21 Jan 2014 | 8:29 PM ET

* Daniel Loeb's Third Point upbeat on SoftBank and Sony

* Bank of Japan to conclude 2-day meeting, seen standing pat

TOKYO, Jan 22 (Reuters) - The Nikkei share average held steady on Wednesday morning as investors were cautious ahead of the outcome of the Bank of Japan's policy meeting, while Tokyo Steel Manufacturing Co Ltd jumped after reporting robust third-quarter results. The Nikkei was little changed at 15,793.02 in mid-morning trade, holding its 25-day moving average of 15,765.34. "Trading size (for each order) is not huge," a Tokyo-based trader at a European bank said. "The reason is partly that the BOJ is coming out with an announcement during the day. You don't want to be too aggressive this morning." "The consensus is that the BOJ is not going to do anything ... However, there does seem to be a few people out there that seem to think there is something going on," he added. The BOJ, which stunned financial markets in April with a massive stimulus programme, is to conclude a two-day policy-meeting later in the day. The central bank prefers not to ease again unless clear evidence emerges that a planned sales tax increase in April causes far more damage than expected. But expectations that the BOJ will pump more money into the economy will keep Japanese stocks supported following the Nikkei's 57 percent jump last year, its best annual rise since 1972. Hedge fund manager Daniel Loeb's Third Point is among those who are positive on Japan in 2014. "Japan will be a high-beta trade. Gains will be driven by BOJ policies and potentially by Japanese citizens investing in the markets in anticipation of inflation," the hedge fund said in a quarterly letter. "Both scenarios, however, face a road block in the form of the increasing consumption tax," it added. The hedge fund also said it expected to see more gains this year in its holdings in SoftBank Corp and Sony Corp . SoftBank slipped 0.2 percent and Sony lost 1.2 percent. In 2013 they jumped 193 and 91 percent, respectively, outpacing the Nikkei. The broader Topix index was up 0.3 percent at 1,299.49, with volume at 31 percent of the full daily average for the past 90 trading days. Tokyo Steel, an electric furnace steelmaker, climbed 6.6 percent after its third-quarter earnings. Peer Kyoei Steel Ltd gained 2.9 percent and Tokyo Tekko Co Ltd advanced 2.4 percent. But ahead of the full-swing of the quarterly earnings season, Japanese companies' one-month earnings momentum slowed to 1.7 from 4.3 percent last month, data from Thomson Reuters I/B/E/S showed, giving a relatively downbeat signal. The JPX-Nikkei Index 400, a recently introduced gauge comprised of companies with high return on equity and robust corporate governance to appeal to investors, added 0.3 percent to 11,731.54.

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