The Nikkei average edged down in the lowest volume of the year on Monday with a stronger yen countering bargain hunting, and market players saying the benchmark will likely hover around 9,500 at least until US jobs data on Friday. Trade was especially thin with US markets closed for a long weekend and the UK markets also closed for a bank holiday.
--- Honda falls on share buyback decision, data breach The index has traded narrowly between 9,400 and 9,600 for the past two weeks. On one hand, worries about a slowdown in the US economy and European debt problems have prevented sharp gains while attractive valuations have lent support. Shares on the Tokyo stock exchange's main board are trading at around book value, while stocks in the S&P 500 trade at about 2.2 times their book value, according to Thomson Reuters Starmine.
Some analysts said the Nikkei will likely continue to be supported above 9,405, an intraday low hit on April 19 but others say it could fall below that if US jobs data disappoints. "On top of pessimism about the US economic recovery, the strong yen is a concern for Japanese shares," said Yutaka Miura, a senior technical analyst at Mizuho Securities. The benchmark Nikkei fell 0.2 percent to 9,504.97. The broader Topix index shed 0.2 percent to 823.68.
Yutaka Yoshino, a senior analyst at SMBC Nikko Securities, said that although the market will unlikely weaken significantly from the current levels in June, the Nikkei could slide to around 8,880 temporarily if it falls below 9,300. The dollar fell broadly on Friday after weaker-than-expected US consumer spending and housing data stoked worries that the economic recovery is losing momentum. The US dollar index fell 1 percent, its largest drop since January 13.
In Asian trade on Monday, it was trading around 80.86 yen. Honda Motor fell 1.3 percent to 3,030 yen, hurt by a decision to suspend share buybacks temporarily to preserve funds after the March 11 quake and tsunami and after it said the personal information of more than 283,000 customers at its Canadian unit has been breached. But shares in Sumitomo Realty & Development Co added 1.2 percent to 1,710 yen, after Barclays Capital lifted its rating on the stock to "overweight" from "equal weight", saying it had its core leasing business had the strongest growth potential among the nation's top three property firms.
Freebit Co, a cloud computing consultancy, soared 13.2 percent to 299,900 yen after its Chinese joint venture, FBII Network Technology Co, said it had signed an agreement to tie up with China Telecom Corp on machine-to-machine networks. The daily volume was the lowest for this year, with only 1.38 billion shares changing hands on the Tokyo stock exchange's main board. Last week's daily average volume was 1.64 billion shares.