Tokyo shares outlook - Higher; gains seen limited ahead of data, weekend

Tokyo shares outlook - Higher; gains seen limited ahead of data, weekend

	Published : Thu, 11 Jan 2007 23:55 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Share prices are expected to open higher, tracking gains on Wall Street due to an improved US economic outlook in the wake of another strong job report, dealers said.

The US Labor Department said the number of newly laid off workers seeking unemployment benefits fell by 26,000 to 299,000 last week on a seasonally adjusted basis. It was the first time jobless claims have moved below 300,000 since the week of July 22.

The strong jobs data, which followed last Friday's report that US employers had increased their payrolls by 167,000 jobs in December, more than the 100,000 the market had expected, affirmed the strength of the US economy.

But opening gains may be trimmed, as local players move to take profits ahead of the weekend and the release Monday morning of the closely-watched private sector machinery orders - the leading indicator for corporate capital investment, dealers said.

Investors may also show some caution ahead of next week's policy board meeting by the Bank of Japan following new media reports that the central bank is leaning towards raising interest rates at next week's policy board meeting, with consumer spending remaining firm and worries of a US economic slowdown receding, they said.

In New York, the Dow Jones Industrial Average closed up 72.82 points or 0.59 pct at 12,514.98, while the Nasdaq composite index ended up 25.52 points or 1.04 pct at 2,484.85.

In Chicago, the Nikkei futures contracts settled at 17,035 points, up from 16,860 at the Osaka Securities Exchange yesterday, suggesting a firm opening for the Tokyo market.

On the Tokyo bourse yesterday, the Nikkei 225 Stock Average closed down 104.23 points or 0.62 pct at 16,838.17, while the TOPIX index of all issues listed on the Tokyo Stock Exchange's first section ended the session down 6.28 points or 0.38 pct at 1,656.72.

Ahead in Japan, the Bank of Japan will release money supply and bank lending data for December, while the Cabinet Office will announce the economy watchers survey for December.

Sharp President Katsuhiko Machida will also hold a New Year news conference.

Stocks to watch include Fast Retailing, the operator of Uniqlo casual wear shops, after it slashed its year to August profit forecasts due to massive sales amid unstable weather conditions.

Mitsubishi Motors Corp may be active on a report that the automaker is considering the possibility of jointly assembling cars in Russia with PSA Peugeot Citroen Group.

The Nikkei reported, without citing sources, that under the plan, the two automakers will spend 50 bln yen to build a factory in the suburbs of St Petersburg with capacity of 200,000 vehicles a year.

Nippon Oil Corp, Japan's largest oil refiner, may move on a report that it is studying a bid for a further stake in Japan Petroleum Exploration Co, or Japex, in an auction the Ministry of Economy, Trade and Industry plans to hold as early as March. The Nippon Oil group already owns a 2.8 pct stake in Japex, while the ministry owns 28.54 mln shares, or a 49.9 pct stake.

Tokyo Steel Manufacturing may be active on a report that Mitsui & Co Ltd plans to sell its entire 1.7 pct interest in the electric furnace operator.

(1 usd = 120.44 yen)

yasuhiko.seki@xfn.com