Japan's benchmark Nikkei average eked out a narrow gain on Thursday of 0.20 percent after seesaw trade, with gains in steel and commodity-linked firms countering sales of semiconductor-linked shares such as Sumco Corp Shares of Aiful Corp and other consumer finance firms tumbled on media reports that credit card firm Mitsubishi UFJ Nicos Co expected to post an annual net loss.
Just after the close, it said it was revising its 2007/08 group net forecast to a 111.80 billion yen loss from a 15.50 billion yen profit. The narrow trade contrasted sharply with Wednesday's activity, when the Nikkei made its biggest daily percentage gain since March 2002, and dealers said that investors eager to lock in profits had sold on rises.
"After yesterday, there just wasn't that much energy in the market, with sales of semiconductor-linked firms weighing things down after bad sales data came out both in Japan and the United States," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. An industry group said on Wednesday that orders for Japanese equipment used to make microchips fell short of sales in August on slower demand from DRAM makers and weaker-than-expected demand for Intel Corp's logic chips.
Similarly disappointing data out of the United States later on Wednesday also led to further sales of semi-conductor linked shares, with sentiment damaged still more after Morgan Stanley on Thursday downgraded Sumco.
The benchmark Nikkei rose 32.25 points to 16,413.79, after dipping into negative territory several times. The broader TOPIX index fell 0.05 percent to 1,566.84. Trading volume was moderate, with 1.91 billion shares changing hands on the Tokyo stock exchange's first section compared with a daily average of 2.3 billion shares in August.
Decliners outweighed advancers by 975 to 653. Mitsubishi UFJ Nicos ended down by 13.4 percent at 239 yen while that of Aiful finished down 11.2 percent at 1,732 yen. Mitsubishi UFJ Financial Group (MUFG), Japan's biggest bank, said later that it will buy about $1 billion worth of shares from Mitsubishi UFJ Nicos to bolster the credit card unit's financial health.
It plans to make the unit a wholly owned subsidiary. Chip gear supplier Advantest Corp lost 4.7 percent to 3,690 yen and its peer Tokyo Electron Ltd slid by 4.9 percent to 7,340 yen. But such losses were countered by strength in trading firms and steel companies, buoyed by high crude oil and metals prices. Trading house Marubeni gained by 5.2 percent to end up at 990 yen and Itochu Corp up 2.1 percent at 1,356 yen.
Japan Steel Works Ltd climbed 4.6 percent to 1,748 yen after the cast and forged steel products maker raised its full-year operating profit forecast 6.9 percent to 27.8 billion yen on stronger-than-expected sales of products used by power generation facilities and desalination plants.