Last Update 22:31
Thursday, 29 July 2021

Nikkei breaks above 25-day moving average

Positive US housing data and a deal to extend the US payroll tax cut for two months pushes Japan's main index upwards

Reuters, Monday 26 Dec 2011

Japan's Nikkei average rose on Monday to breach its 25-day moving average after upbeat US housing data and a deal to extend the US payroll tax cut for two months.

Industrial robot maker Fanuc rebounded 3.1 per cent after losing 3.4 per cent in the previous session after the machine tools sector was downgraded to "bearish" by Bank of America Merrill Lynch.

Within the tool makers' sector Makita Corp surged 6.8 per cent, extending gains from a high for the year hit last week, after the company said on Thursday it would buy back 2 million of its own shares worth up to 5.8 billion yen between 26 December and 10 January.

The Nikkei was up 1.3 per cent at 8,500.73 by 0124 GMT, trading above its 25-day moving average of 8,459, while the broader Topix index added 0.6 per cent to 727.56.

"The Nikkei is moving with New York. The gains in the U.S. and Europe gave some sense of relief to markets ... There are still a lot of overseas factors such as North Korea, Middle East unrest and of course Europe that are everyone's concern," Hajime Nakajima, a wholesale trader at Cosmo Securities in Osaka, Japan.

Trading is expected to be thin, however, with many markets, including the United States, Europe and Hong Kong, closed for extended Christmas holidays.

Tokyo Electric Power Co lost 4.5 per cent after Kyodo news agency said on Sunday that the troubled utility and a government-backed support mechanism for nuclear disaster compensation have asked major lenders to extend the repayment deadline for 2 trillion yen borrowed by the troubled utility.

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