Nikkei jumps on improved China PMI, Fed minutes; exporters rise
* Exporters gain on weak yen vs dollar after Fed optimism * Sanrio dives as GS cuts target on plan to shift focus to goods sales By Ayai Tomisawa TOKYO, May 22 (Reuters) - Japan's Nikkei share average rose sharply on Thursday morning as a survey showing an encouraging improvement in Chinese manufacturing added to an already upbeat mood after the U.S. Federal Reserve reaffirmed its commitment to support the economy. China's factory sector turned in its best performance in five months in May, a preliminary HSBC survey showed on Thursday. While the overall manufacturing sector still contracted, the survey provided some reassurance to markets worried about the slowdown in the Asian economic powerhouse. Fanuc Corp gained 0.7 percent and Komatsu Ltd added 0.6 percent. The Nikkei rose 1.5 percent to 14,245.15 in mid-morning trade after falling 0.2 percent to 14,042.17 on Wednesday. The index still trades below its 25-day moving average of 14,288.71. Risk appetite improved after minutes of the Federal Reserve's late April meeting showed policymakers discussed exit strategies from ultra-loose monetary policy. But they also made clear that the Fed was not signalling that it was ready to "normalize" policy or raise interest rates any time soon. That buoyed U.S. stocks on Wednesday, helping steer Asian shares up nicely. The early spotlight fell on Sanrio Co, creator of characters including Hello Kitty, which dived 22.5 percent to 2,410 yen, the lowest since August 2012 and was the most traded stock by turnover. Reflecting branding concerns after the company said it will shift its focus to goods sales from licensing, Goldman Sachs cut its target price to 3,200 yen from 3,800 yen. Sanrio's plan "is conducive to high efficiency and rapid growth but also carries brand dilution risk, to merchandise sales, which are more stable. We expect cost to rise in the short term," the brokerage wrote in a report. The Nikkei's main support came from exporters after the dollar gained against the yen for the first time in six sessions and fetched 101.46 yen, well off a 3-1/2 month low of 100.80 plumbed overnight. Toyota Motor Corp rose 0.9 percent, Sony Corp added 1.2 percent and Honda Motor Co advanced 1.0 percent. A weak yen boosts Japanese companies' profits overseas when repatriated and raises their competitiveness abroad. "Investors took heart from the Fed and the dollar-yen level, but it still seems like a technical rebound," said Nobuhiko Kuramochi, a strategist at Mizuho Securities. Kuramochi with the Bank of Japan chief Haruhiko Kuroda on Wednesday giving no hint of further monetary easing, the market has shifted its focus companies' earnings in the April-June earnings after the sales tax rose in April. Ahead of the earnings, the Nikkei will likely be mired in a range of 14,000-14,500, he said. The broader Topix gained 0.6 percent to 1,156.76, and the new JPX-Nikkei Index 400 added 0.6 percent to 10,550.65. (Editing by Shri Navaratnam)
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