Japanese shares rangebound on profit taking

December 15, 2010 12:00 am

, TOKYO, Dec 15 – Japanese shares ended nearly flat Wednesday on profit taking after an encouraging overnight rally on Wall Street.

The headline Nikkei index edged down 0.07 percent to 10,309.78, after zigzagging between positive and negative throughout the day.

The Topix index of all first section shares rose marginally, up 0.06 percent to 902.42.

A slightly weaker yen at 83.90 to the dollar lifted sentiment, as did the overnight rally by US shares.

Broad profit-taking weighed on Tokyo shares after recent rallies in Tokyo and New York, analysts said.

"Since shares have been strong lately, investors are leaning towards selling before the year-end," Yutaka Yoshii, general manager at Mito Securities, told Dow Jones Newswires.

An overnight rise in US shares provided Tokyo with support, as did the Japanese government’s decision this week to lower the 40.7-percent corporate tax by five percentage points next year.

But buying was muted by worries over the US outlook as well as weaker Japanese business confidence flagged in the latest quarterly Tankan survey by the Bank of Japan, analysts said.

Sluggish earnings by US retailer Best Buy fuelled doubts about television sales during the holiday shopping season.

"There is some uncertainty in the United States despite earlier expectations for a strong Christmas season," Monex brokerage house analyst Toshiyuki Kanayama told Dow Jones Newswires.

The market was also discouraged, but not surprised, by the Tankan showing sentiment among Japan’s big manufacturers had deteriorated for the first time in seven quarters.

"The results are mostly within expectations, but they show that corporate managers have quite a severe view on the outlook," Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones.

In the mixed trade, Panasonic lost 0.08 percent to 1,192, while Hitachi fell 0.72 percent to 412.

However, Sony ended up 0.40 percent at 3,000. Canon added 0.36 percent to 4,095.

Toyota Motor gained 0.92 percent to 3,290. Honda Motor rose 0.15 percent to 3,175.

Pharmaceutical firm Otsuka Holdings rose on its debut, ending the day at 2,140, compared with its initial public offer price of 2,100.


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