Japan stocks power higher on yen, rate cut

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Tokyo, Nov 1: Japanese stocks edged higher on Thursday, powered by relief after the Federal Reserve interest rate cut and unexpectedly good news about the U.S. economy, with exporters rising on a weaker yen and taking the market with them.

Canon Inc and Sony Corp both rose, joined by auto firms, while energy-linked shares such as Inpex Holdings Inc climbed after oil surged to a new record high above $94.

But the biggest factor was the Fed rate cut in combination with government data showing the U.S. economy expanded in the third quarter at its fastest rate since the beginning of 2006, while another report showed private employers added workers this month at the greatest rate since June.

''Most people are emphasizing the economic data over the rate cut, and then the yen has gotten weaker against the dollar. All of these things are good for stocks,'' said Masayoshi Okamoto, head of dealing at Jujiya Securities.

''In addition, the current Nikkei level -- from 16,800 on up -- is extremely satisfying. A sudden jump to 17,000 right away is unlikely, but a slow, steady rise through at least the middle of the month is entirely possible.'' Tokyo stocks have also been supported by a general sense that earnings results have been good for the most part. Among companies set to announce results on Thursday are Daihatsu Motor Co, Bridgestone Corp, and Kirin Holdings Co As of 0100 GMT the benchmark Nikkei average was up 0.68 percent at 16,850.84, a gain of 113.21 points. The broader TOPIX was up 0.79 percent at 1,633.25.

Exporters Rise

Though exporters rose in general, Sony gained extra upward impetus after the company said its Sony Pictures Entertainment division is exploring the possibility of selling or forging equity partnerships for half of its animation studio, home to films like ''Surf's Up'', and an even larger portion of its digital-effects company.

Sony was up 3 percent at 5,810 yen and Canon up 3.3 percent at 5,940 yen.

Mitsubishi Motors Corp surged 5.8 percent to 237 yen, two days after lifting its annual operating profit forecast by 37 percent.

Advancing stocks outnumbered decliners by more than two to one.

A stand out among shares that were not faring so well was Tokyo Electric Power Co The company, Asia's biggest power producer, fell 2.2 percent to 2,855 yen, having cut its earnings outlook for the second time this year to forecast a loss -- its first in 28 years -- after it had to close the world's biggest nuclear power plant following an earthquake.

The company, valued for its stable dividends, also cut its annual dividend outlook to 65 yen from 70 yen. This marks the first year-on-year dividend decline in 28 years.

Reuters
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