Tokyo stocks up 0.47pc by noon

TOKYO: Japanese stocks edged up 0.47 percent Thursday morning, with the worse-than-expected core machinery orders for July dragging down heavy machinery shares.

By the break, the benchmark Nikkei 225 index at the Tokyo Stock Exchange opened up 41.21 points at 8,804.62.

The broader Topix index of all first-section issues was up 0.62 percent or 4.64 points at 758.27.

"The overnight rise in European and US shares had no solid drivers and was likely sparked by temporary short-covering," Hideyuki Ishiguro, a strategist at Okasan Securities, told Dow Jones Newswires.

"Equity markets globally seem overly optimistic at this point," he added.

Fanuc fell 2.07 percent to 11,770 yen, with Komatsu off 1.72 percent at 1,885 yen.

Official data showed earlier that Japan's core machinery orders data, which exclude volatile demand from power companies and for ships, fell 8.2 percent in July from the previous month, steeper than forecasts of a 4.0 percent fall.

Toshiyuki Kanayama, senior market analyst at Monex, said chip-related shares were among the best performers after an Intel senior officer said the firm was in-line with forecasts for the third quarter despite recent market volatility.

"Pre-market net buying by foreign investors following 28 days of straight net selling is also a significant factor and is boosting today's sentiment," Kanayama said.

Tokyo Electron was up 2.67 percent at 3,640 yen, with Advantest up 1.84 percent at 938 and Renesas Electronics up 1.42 percent at 497 yen.

US and European markets rebounded overnight after Germany's Constitutional Court ruled that Germany could join in a eurozone-wide bailout mechanism, removing an obstacle to rescues of Greece and other struggling countries.

The gains continued after the Federal Reserve reported that the US economy has continued to grow slowly, offering a slightly better assessment of the US economy than the grim picture depicted by other recent indicators.

The Dow Jones Industrial Average rose 275.56 points (2.47 percent) to close at 11,414.86, a healthy rebound after three consecutive trading days of heavy losses.

The dollar fetched 77.40 yen in Asian trade, higher than 77.26 in New York late Wednesday. The euro eased to 108.79 yen from 108.89 yen.

The euro edged down to $1.4056 in Asian trade from $1.4096 in New York late Wednesday while trading at 1.2079 Swiss francs, compared with 1.2095 in New York.

Copyright AFP (Agence France-Presse), 2011