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Japanese Market Pares Some Early Gains

3/11/2012 10:04 PM ET

The Japanese stock market moved higher in early trading on Monday, buoyed by a surge in core machinery orders in January and the yen's decline against the U.S. dollar. However, with a section of investors treading cautiously at higher levels, the market pared most of its early gains and is currently trading just modestly higher in positive territory.

The benchmark Nikkei 225 index, which rose to 10,021.5 in early trades, is currently trading at 9,966, up 36.3 points or 0.4 percent over its previous close.

Shares from precision instruments, marine transport, manufacturing, rubber and insurance sectors started off on a firm note. Pharmaceuticals, automobile and financial stocks were mixed in early trades.

Sumco Corp shares are up nearly 5 percent. Chiyoda Corp is trading nearly 4 percent up and Kobe Steel and JFE Holdings are trading higher by around 3 percent. JFE Holdings, Credit Saison and GS Yuasa are trading higher by over 2 percent.

Hitachi Construction Machinery, Nippon Light Metals, Fuji Heavy Industries, Yokohama Rubber, Matsui Securities, Daiwa Securities Group, Fuji Electric, Inpex, All Nippon Airways, Fast Retailing, Mitsubishi Chemicals and Mitsubishi Materials are also up with strong gains.

Meanwhile, Nippon Paper Group, Daikin Industries, Oji Paper, West Japan Railway, Asahi Group Holdings, Sojitz Corp, Kansai Electric Power, Olympus, Chiba Bank and Chubu Electric Power are trading lower by 1 to 3 percent.

According to data released by the Cabinet Office, core machine orders in Japan were up a seasonally adjusted 3.4 percent on month at 757.8 billion yen in January. That beat forecasts for an increase of 2.3 percent following the 7.1 percent contraction in December.

An on annual basis, core machine orders jumped 5.7 percent - again beating forecasts for a gain of 4.4 percent following the 6.3 percent jump in the previous month. For the first quarter of 2012, core machine orders are forecast to rise 2.3 percent on quarter and 4.3 percent on year.

Meanwhile, an index measuring prices for corporate goods in Japan was up 0.2 percent in February compared to the previous month, standing at 104.7, the Bank of Japan said. That matched forecasts following the 0.1 percent contraction in January. On a yearly basis, prices collected 0.6 percent - also in line with expectations following the 0.5 percent increase a month earlier.

Export prices were up 2.7 percent on month but fell 3.5 percent on year, the data showed, while import prices rose 2.5 percent on month and 2.6 percent on year.

In the currency market, the U.S. dollar traded in the lower 82 yen range in early deals in Tokyo.

Among other markets in the Asia-Pacific region, Australia and South Korea are trading notably lower. Hong Kong, Malaysia and Taiwan are down marginally, while New Zealand and Singapore are trading higher. Markets across the region ended mostly higher on Friday.

On Wall Street, stocks ended higher thanks to better than expected U.S. employment data. The Dow edged up 14.1 points or 0.1 percent to 12,922, the Nasdaq rose 17.9 points or 0.6 percent to 2,988.3 and the S&P 500 climbed 5 points or 0.4 percent to 1,370.9.

Major European markets ended higher on Friday. While the French CAC 40 index edged up by 0.3 percent, the U.K.'s FTSE 100 index and the German DAX index gained 0.5 percent and 0.7 percent, respectively.

U.S. crude oil futures closed higher for a third straight day Friday, as demand prospects rose after a U.S. report showed better than expected rise in jobs for February. Prices were also positively impacted by data indicating China's inflation had eased and reports of an agreement in the Greek debt swap deal.

Crude for April delivery gained $0.82 or 0.8 percent to close at $107.40 a barrel on the New York Mercantile Exchange after hitting a high of $108.20 a barrel intraday.

by RTT Staff Writer

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