Nikkei hits fresh 3-mth high, Toyota up in high volume
08/02/2012 at 02:56
* Nikkei up 0.5 pct to fresh three-month high * Toyota gains 2.7 pct in heavy volume * Chipmakers surge on news of major industry realignment By Mari Saito TOKYO, Feb 8 Reuters - Japan's Nikkei average climbed to a fresh three-month high on Wednesday, boosted by a stronger-than-expected profit outlook from Toyota Motor Corp , which offset worries about Greece's postponement of a decision on terms of a new bailoutToyota rose 2.7 percent to a six-month high, trading at 70 percent of its average daily 90-day volume after lifting annual profit guidance by more than a third, citing cost cuts and expected benefits from Japanese government schemes. Nomura raised Toyota's target price to 3,900 yen from 3,700 yen, maintaining its "buy" rating on the stock and saying that fourth-quarter guidance still looked cautious considering its upside potential
Chipmakers jumped on news of likely major realignment in the troubled industry, with sources saying Renesas Electronics , Fujitsu Ltd and Panasonic Corp were in talks to merge their system chip operations
Renesas soared 10.3 percent, Fujitsu bounced 3.4 percent and Panasonic was up 1.6 percent, while Elpida Memory surged 5.6 percent on a report that it could be selling its Hiroshima plant as part of the deal
The benchmark Nikkei gained 0.5 percent to 8,961.07, hitting its highest intraday level since Oct. 31 last year, while the broader Topix added 0.4 percent to 776.04
"The Nikkei does face considerable resistance at the 9,000 level, but since the options settlement is on Friday and many market participants did not expect the benchmark to top that level, there could be hedging and futures buying if we get closer to it," said Kenichi Hirano, operating officer of Tachibana Securities
"That could boost momentum and push the Nikkei over 9,000 very quickly." Worries about Greece capped the upside after politicians in the debt-ridden country delayed a decision yet again on unpopular terms of a crucial 130 billion euro bailout. The package must meet the Feb. 15 deadline to gain approval by the euro zone, European Central Bank and International Monetary Fund
Despite the uncertainty, the single currency held near a two-month high against the dollar in Asia
U.S. indexes also edged up overnight, buoyed by Coca-Cola Co , which posted better-than-expected quarterly results, while technology bluechips like Apple and Microsoft also logged gains
Hirano at Tachibana Securities said recent stock gains could be attributed to excessive market liquidity after the Federal Reserve pledged to keep interest rates near zero until at least 2014, a policy that is unlikely to change despite signs of improvement in the U.S. economy
"This means U. S. stocks will continue their rally for now and the Nikkei will follow suit, although in terms of price-to-earnings valuations Japanese stocks are no longer cheap," he said
The Topix has a 12-month forward price-to-earnings ratio of 12.1, a level not seen since early August, data from Thomson Reuters Datastream showed. This compared to S&P 500's 12.4 and STOXX Europe 600's 10.2
Additional reporting by Dominic Lau; Editing by Edwina Gibbs mari.saito@thomsonreuters.com+81 3 6441 1934 Reuters Messaging: mari.saito.thomsonreuters.com@reuters.net Keywords: MARKETS JAPAN STOCKS