Nikkei rises on weak yen, ECB stance; Suzuki Motor, Takata fall
* Suzuki Motor tumbles to 1-week low on weak earnings * Nikkei prone to profit-taking when it nears 17,000 - traders * Takata falls after NYT says company hid risks By Ayai Tomisawa TOKYO, Nov 7 (Reuters) - Japan's Nikkei share average rose on Friday morning as sentiment was supported by a pledge from the European Central Bank to take further steps to revive the euro zone economy, while Suzuki Motor Corp tumbled on poor earnings. Takata Corp was another big loser, falling more than 4 percent, reversing earlier gains after a newspaper reported that the Japanese auto parts maker had concealed the risks of potentially defective air bags following an accident in 2004. ECB President Mario Draghi said the central bank aims to increase the size of its balance sheet towards the levels of 2012, effectively committing to add an extra 1 trillion euros to get a fragile economy motoring again. The news was taken as a positive signal by many investors unnerved by signs of slowing global growth. The Nikkei rose 0.6 percent to 16,885.64 in mid-morning trade after dropping 0.9 percent to 16,792.48 on Thursday. For the week, the benchmark has added 2.9 percent. The Nikkei has stayed closer to a seven-year high at 17,127.66 marked on Tuesday as investors cheered the Bank of Japan's shock move on Friday to expand its monetary stimulus programme, as well as a decision by the Government Pension Investment Fund to increase its allocation of funds to domestic stocks. But traders say the Nikkei is prone to profit-taking when it trades above 17,000. "Due to the steep rises over the past few days, 17,000 has become a psychological resistance level," said Jun Yunoki, a strategist at Nomura Securities. "Valuation is still cheep, but people are cautious as the market seems overheated." However, he said there is more room to rise in the medium term on expectations that companies will post strong full-year earnings thanks to the weaker yen. A weak yen continued to underpin some exporters as the dollar traded at 115.23 yen, holding close to a seven-year high of 115.42 yen hit on Thursday. That helped exporters such as Honda Motor Co and Panasonic Corp , up 1.0 percent and 1.4 percent, respectively. Chip-making device maker Disco Corp soared 7.4 percent after it raised its operating profit outlook for the year through March to 23.2 billion yen from 19.1 billion yen. However, Suzuki Motor dived 6.0 percent to a one-week low after its operating profit fell for the first time in eight quarters in July-September hit by sluggish demand in Japan. The broader Topix rose 0.8 percent to 1,367.39, and the JPX-Nikkei Index 400 advanced 0.8 percent to 12,481.26. (Editing by Shri Navaratnam)
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