Tokyo shares outlook - Higher on Wall St gains, waning of worry about US economy

Tokyo shares outlook - Higher on Wall St gains, waning of worry about US economy

	Published : Wed, 31 Jan 2007 23:53 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Share prices are expected to open higher in the wake of a sharp rally on Wall Street overnight due to the waning of worries about the economy in the US and inflation there, dealers said.

The Federal Reserve said in the economic assessment released after it decided to leave short-term interest rates unchanged at 5.25 pct that recent indicators 'suggested somewhat firmer economic growth' and tentative signs of stabilization in the housing market.

The accompanying statement also said that readings on core inflation have 'improved modestly' in recent months.

Renewed optimism about the economy here may also support the market, after the results of a survey by the news media indicated that GDP in the fourth quarter of last year was 0.9 pct higher in real terms than in the third, growing at an annual rate of 3.7 pct, dealers said. The Cabinet Office will announce the official preliminary GDP figures Feb 15.

In the US, the Dow Jones Industrial Average closed 98.38 points or 0.79 pct higher at 12,621.69 overnight, while the Nasdaq was up 15.29 points or 0.62 pct at 2,463.93. In Chicago, the Nikkei futures contract settled at 17,430 points, up from 17,390 at the Osaka Securities Exchange yesterday, suggesting a firm start for the market here.

Yesterday, the blue-chip Nikkei 225 Stock Average closed 106.77 points or 0.61 pct lower at 17,383.42, while the TOPIX index of all first-section issues finished down 9.64 points or 0.56 pct at 1,721.96.

Later today, the Japan Automobile Dealers Association will release the figures for sales of new cars last month.

Astellas Pharma, Konica Minolta Holdings, Denso, Suzuki Motor, Toyota Tsusho, Matsushita Electric Industrial and Casio Computer are among the companies that will release their results for the nine months to December.

Dealers said that stocks to watch included Tokyo Electric Power Co Inc, after a newspaper reported that the company had concealed a faulty pump designed to cool the reactor core in case of an emergency at one of its nuclear power plants in 1992 in order to pass a government inspection.

Nikko Cordial Corp could tumble on a report that the brokerage might have generated nearly 17 bln yen in profit in the fiscal year ended last March through special-purpose company NPI Holdings Inc, just one year after it cooked its profit report, dealers said.

They said shares in scandal-hit confectioner Fujiya Co Ltd might move after a newspaper reported that the company would will ask Yamazaki Baking Co for capital and other forms of assistance this week.

Japan Airlines Corp may advance after a newspaper reported that the airline had decided to sell off seven hotels here and abroad as it is accelerates its efforts to scale back its non-aviation operations, dealers said.

They said Pioneer Corp might fall after the company issued a profit warning for the fiscal year ending March, blaming lower-than-expected sales of plasma display panel TVs.

Toshiba Corp may tumble after the company said its operating profit in the fiscal third quarter to December had tumbled by nearly 12 pct from a year earlier because of steep declines in the selling price of its semiconductor chips, forcing it to issue a profit warning for this fiscal year, dealers said.

(1 usd = 120.70 yen)

yasuhiko.seki@xfn.com