Nikkei edges up in 5th day of gains, Wall Street supports

By: | Published: July 17, 2015 8:57 AM

Japanese stocks extended their rise into a fifth day on Friday morning thanks to strength on Wall Street, but gains were capped as investors refrained from taking big positions before a long weekend.

Japanese stocks extended their rise into a fifth day on Friday morning thanks to strength on Wall Street, but gains were capped as investors refrained from taking big positions before a long weekend.

The Nikkei share average edged up 0.2 percent to 20,647.84 in midmorning trade. For the week, the benchmark has jumped 4.4 percent, heading for the biggest weekly gain since last October.

Wall Street ended higher on Thursday helped by strong earnings reports.

Market participants said that most investors will likely stay on the sidelines during the session before the long weekend in Japan. Monday is a national holiday in Japan.

“I don’t think worries about a rout in Chinese shares are completely over,” said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.

He said Japanese stock could be pressured again if foreigners turn sellers on any further shakeout in Chinese markets next week. However, retail investors who actively bought Japanese shares last week, could limit any downside.

In the previous week when the Nikkei benchmark fell to a 3-month low, retail investors’ net buying in Japanese cash stocks was 527 billion yen, the largest net buying since January 2014, according to data released by Japan Exchange Group.

On the other hand, foreign investors’ net selling in cash stocks was 438.3 billion yen, the largest since January this year. Combined with futures’ net selling of 1.15 trillion yen, their total net selling was a record high, according to analysts.

Financial stocks were higher, with Mitsubishi UFJ Financial Group rising 1.7 percent and Sumitomo Mitsui Financial Group gaining 0.9 percent.
Underperforming the market was Sharp Corp which tumbled more than 4 percent after the Nikkei business daily reported that it is set to swing to an operating loss in the April-June quarter.

The broader Topix was flat at 1,661.50 and the JPX-Nikkei Index 400 gained 0.1 percent to 15,012.54.

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