Japan stocks rebound as banks up, Nikon jumps

Tokyo, Nov 9: Japanese stocks pulled out of a five-day losing streak on Friday, powered higher by Nikon Corp after it lifted its annual profit outlook above market forecasts, while bank shares regained ground after a sell-off.

Still, worries about the U.S. economy weigh on investor sentiment after Federal Reserve Chairman Ben Bernanke warned that its growth could prove weaker than expected, said Takahiko Murai, general manager of equities at Nozomi Securities.

''The Tokyo market is up to the U.S. market these days, and Friday's trade may lack a clear sense of direction after U.S.

stocks pared some losses towards the end,'' he said.

''Investors appear extremely cautious, however, about buying on dips as the subprime problems have started having an impact on the real economy, as Bernanke said, not just on the financial sector.'' As of 0054 GMT, the Nikkei average was up 0.2 percent or 30.09 points at 15,801.66. The benchmark booked its lowest close since Sept. 10 on Thursday at 15,771.57.

The broader TOPIX index gained 0.3 percent or 4.66 points to 1,521.60.

The dollar was up 0.1 percent against the yen at 112.75 yen above a three-month low of 112.00 hit on Thursday.

The fall in U.S. stocks sent the tech-heavy Nasdaq Composite Index down nearly 2 percent, while the blue-chip Dow lost about 0.3 percent.

Bernanke told U.S. lawmakers that the Fed expects US economic growth to ''slow noticeably'' in the fourth quarter of 2007 and the first half of 2008, citing credit sector turmoil and the likelihood of an intensifying downturn in the housing market.

Nikon Leads

Shares of Nikon surged 10 percent to 3,740 yen, becoming the biggest positive contributor to the Nikkei 225.

The world's No.2 maker of professional cameras posted a 36.8 percent gain in quarterly profit on Thursday on demand for its entry-level digital cameras and raised its annual profit outlook above market forecasts.

Financial stocks gained some strength as Mizuho Financial Group rose 1.2 percent to 570,000 yen and Nomura Holdings added 0.6 percent to 1,917 yen.

Another notable stock was Mitsubishi Electric Corp, which jumped 4.9 percent to 1,384 yen, after JP Morgan raised its rating to ''overweight'' from ''neutral'', citing strong growth potential of its air conditioner sales.

Reuters
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