Nikkei flat as volatility in global bonds curb risk appetite, BOJ buying supports
* BOJ buys ETFs on Tuesday * Sharp's decision to reduce capital to 500 mln yen gives no impact to stock By Ayai Tomisawa TOKYO, May 13 (Reuters) - Japan's Nikkei share average was little changed on Wednesday as volatility in global bond markets capped risk appetite, while investors focuses on companies which released earnings. Expectations that the Bank Of Japan would buy stocks when the market is weak continued to support the broader market. On Tuesday, the central bank bought 36.1 billion yen of ETFs, which was announced after the market close. The Nikkei 225 was flat at 19,622.73 points by mid-morning after opening on a weaker note. U.S. stocks fell as a recent run-up in global bond yields continued to unsettle investors, though stocks recovered from steeper losses after Treasury yields pulled back slightly from six-month highs. U.S. debt had weakened earlier in the day in line with German government bonds, which have been under pressure in recent weeks for reasons that some attribute to optimism that inflation may have bottomed in the euro region. "The Nikkei may remain pressured by uncertainty in the global market for a while, but the downside should be limited because of hopes that the BOJ will counter the market's weakness," said Takuya Takahashi, a strategist at Daiwa Securities. Cyclical shares lost ground, with Toyota Motor Corp falling 1.4 percent, Nissan Motor Co dropping 1.6 percent and Canon Inc shedding 0.7 percent. Companies which reported their earnings were in the spotlight. Daikin Industries soared 3.7 percent after it raised its dividend payout to 60 yen per share from 30 yen per share for the last fiscal year ended March. NKG Insulators jumped 6.0 percent. While its operating profit forecast for the year through March 2016 was 68 billion yen, in line with the market consensus, however, it announced a capital spending worth 56 billion yen for the current fiscal year. "An increase in capital spending is likely to be related to ceramics products for automobiles, and we expect that the spending is backed up with order increases," SMBC Nikko Securities analyst wrote in a report. A source told Reuters that Sharp Corp intends to reduce its capital to 500 million yen from more than 120 billion yen, compared with a previously planned target of 100 million yen. Shares in Sharp were traversing positive and negative territory, with traders saying that changing the amount would not suggest a drastic change in its restructuring plan. The broader Topix dropped 0.5 percent to 1,594.97 and the JPX-Nikkei Index 400 declined 0.5 percent to 14,407.15. (Editing by Kim Coghill)
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