February 1, 2019 / 3:30 AM / 8 months ago

Nikkei rises to highest since mid-Dec, but Nomura, Nintendo drag

* Nikkei has shed 0.1 pct for the week so far

* Murata soars, 3rd most traded stock after strong results

* Fundamental investors wary of Japan on strong yen risk - analyst

By Ayai Tomisawa

TOKYO, Feb 1 (Reuters) - Japan’s Nikkei rose to a 6-1/2-week high on Friday, as index-heavyweight stocks got a lift from strong U.S. shares, although disappointing earnings from Nomura Holdings and Nintendo curbed gains.

The Nikkei share average rose 0.1 percent to 20,797.24 by the midday break, after climbing to a peak of 20,929.63, the highest since Dec. 19. For the week, the index has shed 0.1 percent.

In Wall Street, the S&P 500 posted its best month since 2015 helped by Facebook’s strong earnings and the Federal Reserve’s dovish remarks.

Index-heavyweight Fast Retailing, Fanuc Corp and FamilyMart UNY Holdings were scooped up by investors, rising 1.9 percent, 2.6 percent and 3.7 percent, respectively, putting 73 positive points to the Nikkei.

“Hedge funds’ risk stance appears to have become strong in the U.S. and that’s helping Japanese stocks,” said Masanari Takada, a strategist at Nomura Securities.

But he warned that the Fed’s dovish stance brings on the risk of a weaker dollar against the yen, making long-term investors nervous about investing in Japanese stocks.

“Global macro investors who trade on fundamentals are still cautious even on Japanese companies which post strong earnings,” Takada said.

Murata Manufacturing soared 9 percent and was the third-most traded stock by turnover after the electronic components maker posted a 55 percent rise in its operating profit for the April-December quarter on strong demand for automotive capacitors. Yoshito Takemura, a director of the company, told a news conference, it had managed to weather the impact from the U.S.-Sino trade dispute.

Conversely, Nintendo Co stumbled 9.4 percent and was the most traded stock by turnover after it slashed its full-year hardware forecast for the hybrid home-portable Switch console, revising a figure that had been treated with scepticism by investors.

Separately, Nintendo said on Friday is was developing a mobile title with Line Corp in the company’s latest push into mobile gaming, which lifted Line’s shares by 8.9 percent.

Nomura Holdings tumbled 5 percent after the brokerage firm put its wholesale business under review, as the segment drove it to its heaviest quarterly loss in nearly 10 years.

Zozo Inc tanked 8 percent after the fashion e-commerce website operator cut its annual profit outlook and dividend forecast.

The broader Topix was flat at 1,566.88 after hitting the highest level since mid-December. (Editing by Jacqueline Wong)

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