Nikkei Rises Slightly in Morning on Favorable Environment

Tokyo, July 9 (Jiji Press)--The key Nikkei average rose slightly on the Tokyo Stock Exchange Friday morning thanks to a favorable shift in the environment surrounding the market, but its upside was capped by profit-taking following the previous day's powerful ascent.

At the morning close, the 225-issue Nikkei average stood up 6.27
points, or 0.07 pct, at 9,542.01. On Thursday, the benchmark index jumped
256.09 points.
But the TOPIX index of all first-section issues was down 2.04
points, or 0.24 pct, at 858.98, after gaining 19.51 points the previous day.
The Nikkei climbed over 60 points at the outset of Friday's
trading, buoyed by overnight rises in U.S. and European equities and a halt
in the yen's strengthening on the exchange market.
After the initial wave of buying ran its course, the key market
gauge trimmed its gains and got caught in a narrow band around Thursday's
closing level.
Brokers said the Nikkei's comeback above the 9,500 mark the
previous day made Tokyo stocks vulnerable to selling on rallies, with many
pointing to a lack of market energy in the absence of fresh buying
incentives other than an overall improvement in the external environment.

While buying linked to Friday's special quotation fixing to settle
index options contracts offered support to Tokyo stocks' downside,
liquidations of long positions before the weekend weighed on the market in
nervous trading.
"Investors, by and large, found it difficult to move aggressively
ahead of an event-packed week," said Masatoshi Sato, senior strategist at
Mizuho Investors Securities Co.
Depending on the outcome of the events, investors could become
risk-averse or show renewed appetite for risk assets, putting the market in
a new direction either way, Sato said.
The closely watched events include Sunday's House of Councillors
election in Japan, Thursday's release of China's gross domestic product data
and a series of earnings reports by major U.S. companies.
Falling issues outnumbered rising ones 787 to 675 on the TSE's
first section in the morning, while 201 issues were flat.
Half-day volume came to 804 million shares.

Canon advanced thanks to a newspaper report that the company's
January-June net operating profit jumped 2.8 times from a year earlier.
Many other technology issues also attracted buying, including
Hitachi, Fujitsu and Toshiba.
Trading houses Mitsui and Mitsubishi moved up.
In the financial sector, major brokerage Nomura advanced, while
megabanks Mizuho and Mitsubishi UFJ went down.
Oil developer Inpex plunged 13.34 pct due to dilution worries after
the company announced Thursday a 500-billion-yen capital hike through new
share issuance.
Fast Retailing, which operates the Uniqlo casual clothes chain,
also succumbed to selling after issuing an earnings warning on Thursday.