Nikkei ends flat,Softbank surges

The Nikkei started the day lower after the Federal Reserve said the US economic recovery is faltering,but then gained,with one market player saying European investors were likely buying domestic demand stocks to rebalance their portfolios.

8220;The market is getting a bit of a lift from gains in the rest of Asia,and the overall mood isn8217;t bad even though the dollar is below 90 yen,8221; said Hiroaki Osakabe,a fund manager at Chibagin Asset Management.

8220;But for the Nikkei to really move higher we need both the euro and the dollar to gain,as well as a bit more momentum 8212; perhaps over the next month as quarterly earnings come out.8221;

Shares in Softbank Corp rose nearly 3 per cent to become the second-biggest contributor to the Nikkei 225 as Apple Inc8217;s iPhone 4 made its global debut,with fans pouring into Softbank outlets and Apple8217;s flagship Japan store. Softbank is the exclusive iPhone operator in Japan.

The benchmark Nikkei finished up 0.1 per cent to 9,928.34. Firm support is seen at 9,800,about the level of the Nikkei8217;s 25-day moving average 8212; a proxy for a one-month moving average that8217;s closely watched in Japan.

The broader Topix slipped 0.1 per cent to 879.77.

Osakabe noted that a gap opened from just under 10,000 to 10,100 when the Nikkei fell Tuesday and that it is likely to rise to fill this,but that further gains will be difficult and the benchmark is likely to move in a narrow range over the long term.

One resistance level is at 10,155,the 38.2 per cent retracement of the Nikkei8217;s fall from its April high to early June low,while another is around 10,300,where the Nikkei8217;s 200-day and 50-day moving average come in.

In an additional sign of potential trouble,the Nikkei8217;s slow stochastic,which gives near-term signals on market trends,shows the drop may have further to go.

On weekly charts,the 13-week moving average has crossed below the 26-week moving average 8212; a formation known as a 8220;death cross,8221; often a sign of more falls.

But Nagayuki Yamagishi,a strategist at Mitsubishi UFJ Morgan Stanley Securities,said that it can also be a signal that the market has bottomed out for the short-term. A similar cross formed late last year when the Nikkei hit 9,100,a low subsequently followed by the rebound that peaked in April.

FOREIGN BUYING,IPHONE BOOST

Ministry of Finance data showed overseas investors bought a net 2 billion yen 22.2 million of Japanese stocks in the June 13-19 week.

Prior to last week,foreign investors were net sellers for six straight weeks,dumping a net 1.92 trillion yen of Japanese stocks. But so far this year,they are still net buyers.

Softbank rose 2.8 per cent to 2,503 yen while Dai-ichi Seiko,which supplies connectors to Taiwanese makers of panels used in iPhones and iPads,surged 9.7 per cent to 3,845 yen.

Exporters lost ground broadly,but companies that depend on domestic demand such as property firms found favour. Sumitomo Realty amp; Development gained 2.9 per cent to 1,672 yen,becoming the top percentage gainer among Nikkei components.

Other so-called 8220;defensive8221; shares,which are seen as resilient in the face of turbulent conditions overseas,gained,with cosmetics firms Shiseido up 1.4 per cent to 2,017 yen and home products maker Kao Corp up 1.8 per cent to 2,120 yen.

Trade was thin on the Tokyo exchange8217;s first section,with 1.5 billion shares changing hands,near last week8217;s four-month low.

Declining shares and advancing shares were almost evenly matched,791 to 711.