Nikkei rises to 3-week high on earnings optimism

lunes 20 de julio de 2015 22:41 GYT

* Toshiba rises as retail investors seen covering short
positions - traders
    * Gold rout pressures mining shares

    By Ayai Tomisawa
    TOKYO, July 21 (Reuters) - Japan's Nikkei share average
climbed to three-week highs on Tuesday morning, supported by
growing expectations for strong first-quarter earnings.
    Investors returned to the market after a three-day weekend
in Japan, and were looking to earnings from the likes of 
Yaskawa Electric Corp and Shin-Etsu Chemical Co
 this week. 
    Results from some of the bigger companies, including Nissan
Motor Co, are due next week.  
    The Nikkei share average rose 0.4 percent to
20,726.49 in midmorning trade after climbing as high as
20,770.02, the highest level since June 26.
    "Although companies won't likely change their full-year
forecasts this time," investors are keen to see business plans
are on track, said Masayuki Kubota, chief strategist at Rakuten
Securities. "Most of them expect to confirm that companies'
earnings are resilient."
    Toshiba Corp outperformed, rising as high as 5.8
percent to a near two-week high of 398.6 yen as retail investors
and other short-term hedge funds were seen covering their short
positions on the view that the bad news has already been priced
    A third-party committee hired to look into accounting
irregularities found the company had overstated its operating
profit by 151.8 billion yen ($1.22 billion) over several years, 
an independent investigation said in a report on Monday.
    "Institutional investors and other long-term funds have
already unloaded Toshiba shares, so the current state of its
stock price is driven by short-term investors' trade," said
Takatoshi Itoshima, chief portfolio manager at Commons Asset
Management. "The bad news is out. As long as Toshiba won't be
delisted, such trades will continue."
    Shippers were stronger after the baltic dry index,
or freight charges, rose overnight. Traders also said that
worries about a slowdown in demand in China have receded after
Chinese shares stabilized.
    Mitsui O.S.K Lines soared 4.1 percent and Kawasaki
Kisen Kaisha surged 2.1 percent. 
    Metal and mining shares underperformed hit by a recent rout
in gold prices. 
    Mitsubishi Materials Corp dropped 2.0 percent and
Sumitomo Metal Mining shed 1.8 percent.
    The broader Topix gained 0.3 percent to 1,668.37 and
the JPX-Nikkei Index 400 advanced 0.3 percent to

 (Editing by Shri Navaratnam)