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Japan’s Nikkei average rose 0.9 per cent on Thursday,lifted by Advantest Corp and other tech shares on a stabilizing yen,but investor caution on policy tightening in China capped further gains.
China released a wave of economic data after Tokyo’s midday close including its fourth quarter gross domestic product,which rose 10.7 per cent from a year earlier,compared with market expectations of 10.9 per cent.
Consumer inflation accelerated to 1.9 per cent in the 12 months to December from November’s 0.6 per cent reading. The batch of data prompted economists to say it was only a matter of time before Beijing tightened monetary policy further,though the initial reaction in the stock market was limited.
“What the market is watching most closely now is China’s policy stance. It’s not tightening yet,but the market tends to sensitively react to any signs of tightening policy at an early stage. We’re still in that very precarious place,” said Masaru Hamasaki,senior strategist at Toyota Asset Management.
“But once we pass this phase,investors will likely shift their focus to the strength in the economy and expectations for solid earnings.”
The benchmark Nikkei gained 100.58 points to 10,838.07,reversing an early dip,with support solid around 10,600,just above the Nikkei’s 25-day moving average.
The broader Topix climbed 1.1 per cent to 954.76.
The dollar rose 0.4 per cent to around 91.57 yen,while the euro was up 0.3 per cent to 129.05 yen. Investors fret about a stronger yen as it curbs exporters’ profits when they are repatriated.
“The yen’s stabilizing moves are supporting the market,but if the yen becomes stronger again,the market could easily lose ground as concerns about further Chinese tightening steps remain,” said Yutaka Miura,a senior technical analyst at Mizuho Securities.
On Wednesday,news that China’s central bank has ordered at least two lenders to increase their reserves sparked worries that China may be moving toward tightening policy and slower growth,sending the Tokyo market lower.
TDK,which makes parts for hard disk drives,jumped 3.9 per cent to 6,070 yen after Citigroup raised its rating on the company to “buy/high risk,” partly citing strong demand for personal computers and low hard drive inventory levels.
Analysts said the upgrade contributed to a generally upbeat mood for tech shares.
Chip-tester maker Advantest Corp climbed 3 per cent to 2,582 yen and Sony Corp gained 4.4 per cent to 3,195 yen. Nikon,which makes steppers,rose 2 per cent to 2,031 yen.
