TOKYO, June 11: Japan’s Nikkei held steady on Tuesday, ahead of the outcome of the Bank of Japan’s policy meeting, with investors taking profits on some of the outperformers after the index posted its biggest one-day rise since March 2011 in the previous session.
By the midday break, the Nikkei was flat at 13,513.28 after moving in and out of positive territory in a choppy session.
‘We had such a huge day yesterday. I see a lot of profit-taking today in real estates and a couple of high-beta SPE (semiconductor production equipment) names,’ a Tokyo-based trader said.
He said retail investors were active in the market, while institutional investors were largely quiet.
The real estate sector lost 1.8 percent, while semiconductor production equipment maker Tokyo Electron eased 2 percent after surging 4.5 percent on Monday.
SoftBank Corp climbed as much as 1.8 percent after it said it has agreed with Sprint Nextel Corp to raise its offer for the US wireless operator to $21.6 billion from a previous $20.1 billion to fight off a counter bid from Dish Network Corp.
The stock ended the morning session down 0.5 percent and was the fifth-most traded on the main board by turnover. It surged 9.5 percent on Monday though it is still down 10 percent from a 13-year peak hit on May 20.
The benchmark Nikkei briefly entered bear market territory on Friday after a fierce 2-1/2-week selloff that saw violent price moves and more than a 20-percent drop since May 23, triggered by slowing growth in China and worries the US Federal Reserve may scale back its massive stimulus this year.
Investors had also been disappointed with Prime Minister Shinzo Abe’s growth strategy to revive the economy.
The broader Topix index advanced 0.3 percent to 1,115.76 on Tuesday morning, with volume at 41 percent of its full daily average for the past 90 trading days.
The BOJ will consider taking further steps to curb any future spike in bond yields when it debates policy on Tuesday, with the recent market turbulence threatening to derail its radical stimulus plan that relies heavily on boosting confidence to foster sustainable growth and end chronic deflation.
Goldman Sachs recommended investors go long Nikkei September futures with a target price of 14,500, up 7.3 percent from current level, and a stop below 12,700, saying the concerns over the Fed’s tapering and volatility in the Japanese government bond market were overdone.
‘The incentives for Governor (Haruhiko) Kuroda to use the meeting to signal a firmer and clearer commitment to the easing course, and to highlight the potential to do more, are high and rising,’ the brokerage wrote in a note.
The Nikkei has fallen 15 percent since hitting a 5-1/2 year peak on May 23, but it is up 9 percent since the BOJ’s sweeping monetary expansion campaign was announced on April 4 and has risen 30 percent so far this year. (agencies)
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