Nikkei rises 0.5 pct after sharp fall, eyes on euro

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Japan's Nikkei average rose 0.5 percent on Tuesday, coming off a 10-week closing low booked the day before, with exporters such as Advantest Corp regaining ground.Market players said the market gained mostly on short-covering after the Nikkei lost nearly 4 percent in the past two days, but investors remained worried about the euro zone's fiscal woes and moves in the currency market."Macro and micro situations are improving both in the United States and Japan, and stock prices that have moved in the opposite direction need to catch up with that eventually," said Mitsuo Shimizu, deputy general manager at Cosmo Securities."But problems in the euro zone won't be solved overnight, and the focus is on whether there's a chance they will end up bringing down the global economy."The benchmark Nikkei rose 45.64 points to 10,281.40, after sliding 2.2 percent the previous day to its lowest finish since March 4.The broader Topix dipped 0.2 percent to 918.99.The Nikkei's relative strength index (RSI) stayed just below 40. Anything from 30 and below is considered oversold.The euro slid to a four-year low against the dollar the previous day as investors fretted that the steps some euro-zone nations are taking to cut their budgets will hinder economic growth.The euro was trading around 114.20 yen in early Asian trade, after falling to the 112 yen level the previous day. A stronger yen curbs exporters' profits when repatriated."After an initial rebound, the main focus will be on moves in the currency market, particularly euro/yen, and Asian stocks," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities."Many Japanese exporters have set their euro/yen assumption rates around 120-125 yen and it would be better if the currency pair came closer to these levels."Shares of exporters rose after falling the previous day to help push down the market.Chip-tester maker Advantest Corp gained 2.3 percent to 2,243 yen and chip gear manufacturer Tokyo Electron added 1.4 percent to 5,820 yen. Kyocera Corp was up 1 percent at 8,520 yen.But Mitsubishi Corp and other trading houses slipped after industrial metals prices plunged on Monday, with copper prices falling to their lowest since February, after signs that China's economy was slowing spooked investors already worried about Europe's fiscal woes.DIC Corp tumbled 7.6 percent to 171 yen after the ink and synthetic resin maker said it plans to raise as much as 21.4 billion yen through a public share offering, leading to a share dilution of about 15.9 percent.(For more business news on Reuters Money visit http://www.reutersmoney.in)
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