Tokyo stocks seen rising on solid earnings

Tokyo, Aug 1: Tokyo share prices are expected to open higher today as solid quarterly earnings from such companies as Nippon Oil Corp. inspire buying.

But upper room for the benchmark Nikkei average may be limited after a three-day run that has seen it climb 572 points. Market participants said technical resistance levels include its 200-day moving average of 15,608 and 13-week moving average of 15,542, both as of yesterday's close.

Uncertainty about the US interest rate outlook ahead of the Federal Reserve's policy meeting next week could also curb buying.

''I expect trade here to be bound to a narrow range,'' said Hiroyuki Nakai, chief strategist at Tokai Tokyo Securities.

''US stocks were not sold heavily yesterday, and that suggests selling here will be limited today,'' he said.

Chicago-traded Nikkei futures contracts suggest the market could be on the rise. Nikkei September futures closed at 15,435, up 25 points from the Osaka finish.

Tokyo's Nikkei is expected to move between 15,300 and 15,550 today, market participants said.

It rose for a third session yesterday and closed up 0.74 per cent at 15,456.81.

Japan's biggest industrial electronics maker Hitachi Ltd. may be in focus. After the market closed yesterday it posted a sharp rise in quarterly profit, despite losses in its flat TV and hard disk drive units.

American Depositary of Receipts of Hitachi Ltd. fell 0.24 per cent to 63.5 dollars. In Tokyo, shares of Hitachi, which are one tenth the value of its ADRs, finised up 1.4 per cent at 734 yen (6.41 dollars) prior to the earnings announcement.

Annual land price data from the National Tax Agency today may also be in focus as it is expected to show improvement.

Major companies to announce earnings include Yamaha Motor Co.

Ltd., Astellas Pharma Inc., Tokyo Electric Power Co. Inc. and NTT Data Corp.

STOCKS TO WATCH -- Nippon Oil.

Japan's biggest oil distributor revised up its full-year group net profit forecast yesterday to 98 billion yen (855.3 million dollars) from 70 billion yen due to a rise in the value of its inventories.

For the first quarter it posted a 28 per cent fall in profit to 28.7 billion yen.

-- Toshiba Corp. and Hitachi.

The Japanese electronics firms both posted quarterly profits that were better than expected yesterday, with Toshiba benefiting from strong demand for flash memory chips and Hitachi booking a smaller loss on hard disk drives.

-- Mitsubishi UFJ Financial Group The world's biggest bank by assets said its first-quarter profit fell 15.7 per cent compared with a year earlier, when a fall in bad loans boosted its bottom line, and stuck to its forecast for a full-year earnings fall.

-- Mizuho Financial Group Japan's second-largest bank said its profits rose 33.2 per cent as income from fees and lending jumped. It also said it was on track to meet its forecast, which calls for a full-year earnings gain.

-- Takeda Pharmaceutical Co and Daiichi Sankyo Co.

Takeda posted a 5 per cent rise in quarterly profit on robust sales of diabetes and hypertension drugs, while rival Daiichi Sankyo reported a surprise 36 percent jump in profit and raised its forecasts.

-- Pioneer Corp.

The struggling electronics maker reported a surprise quarterly profit thanks to cost cuts, strong sales of plasma TVs and a weaker yen, and it lifted its full-year outlook by 50 per cent to above market expectations.

Reuters