Nikkei advances as Canon, exporters rebound
TOKYO, Nov 21: The Nikkei share average rose 0.5 percent on Tuesday as shares of Fanuc Ltd., Canon Inc. and other large exporters recouped some losses after sharp selling hit the Tokyo market in the previous session.
But gains were limited as Mizuho Financial Group Inc. fell after its earnings came short of investor expectations, while Bridgestone Corp. slipped after delaying by two years its goal to reach a 5 percent profit margin.
''I think anyone looking at the sell-off on the Nikkei average yesterday thought it was overdone,'' said Katsuhiko Kodama, senior strategist at Toyo Securities.
''But I still think it is too early to say we've entered a full rebound.... After a sell-off like we had -- one that didn't seem to have a fundamental reason behind it -- it's kind of hard to say we've hit the bottom.'' Technical indicators also illustrated the market may be poised for a rebound.
The Nikkei's 14-day relative strength index stood at 22.5 as of Monday's close. A number below 30 is usually taken as a sign of being oversold. The RS1 was currently at 29.8.
The Nikkei was up 77.46 points at 15,803.40 as of 0109 GMT, after losing some 500 points over the previous four sessions.
The broader TOPIX index was up 0.27 percent at 1,538.13, after hitting its lowest close since July in the previous session.
Fanuc, a maker of industrial robots, rose 1.9 percent to 10,520 yen, after falling 3.1 percent in the previous session.
Office equipment giant Canon rose 0.8 percent, recovering some of its 3 percent loss on Monday.
But Mizuho Financial fell 2.8 percent to 800,000 yen after its 16 percent rise in group net profit, reported on Monday, failed to impress investors.
Bridgestone, Japan's largest tyre maker, fell 1.2 percent to 2,415 yen. On Monday it postponed its goal of reaching a 5 percent net profit margin by two years, to 2010, as heated competition, high raw materials prices and the need to spend more on its plants take their toll.