Nikkei inches up on resource stocks

Japan's Nikkei average rose 0.1 pct on Thursday,lifted by resource-linked shares.

Japan’s Nikkei average rose 0.1 per cent on Thursday,lifted by resource-linked shares such as trading house Mitsubishi Corp on higher commodity prices,but gains were limited after the stock index hit a 15-month closing high the day before.

Japan Airlines Corp dropped 8.3 per cent after the Nikkei business daily reported the airline is likely to post a net loss of 1.23 trillion yen ($13.3 billion) this financial year due to a huge restructuring charge,according to a plan from a state-backed turnaround fund.

“Worries that the market may be getting overheated are keeping it from further extending gains. The Japanese market has been climbing since late last year,” said Tsuyoshi Segawa,an equity strategist at Mizuho Securities.

“But it’s not as if the external environment has worsened. Money is moving toward more risk-taking and that is benefiting commodity markets and their related stocks.”

In active trade,the benchmark Nikkei added 7.09 points to 10,738.54,well above its 25-day moving average of around 10,200.

The index edged up the previous day to post its third straight day of gains and a 15-month closing high.

The broader Topix gained 0.4 per cent to 934.85.

Eyes are on future comments and actions by Naoto Kan after Japan named the fiery deputy prime minister as finance minister on Wednesday,turning to a politician with less hawkish fiscal views than his predecessor. But market players said they saw little immediate impact on the market from the appointment.

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Kan,who takes over after 77-year-old Hirohisa Fujii stepped down for health reasons,is a critic of the Bank of Japan for being too rosy in its view of the economy and has pressured the central bank into easing its already hyper-loose monetary policy.

“The news about Kan becoming finance minister will likely be neutral for the market for now as his ability in the new post is still unknown and investors want to see what he is capable of from now on,” said Hiroichi Nishi,general manager of equity marketing at Nikko Cordial Securities.