Tokyo stocks stay up

Tokyo stocks rose for a second straight day on Thursday, helped by robust results from Apple Inc and upbeat outlooks from other US manufacturers, but mixed signals on supply chain woes kept investors on tenterhooks ahead of Japanese earnings. The March 11 earthquake and tsunami that devastated Japan's north-east have wreaked havoc with production at many manufacturers, which are grappling with parts and power shortages.
Yaskawa Electric, one of the first big Japanese manufacturers to report, said it was unsure if it could maintain full output in May and June amid parts shortages and uncertain demand. But Apple Chief Operating Officer Tim Cook said he does not see any unsolvable problems for Apple related to the disaster. However, the company, known for its tight relationship with Asian suppliers, stands at the head of the queue for electronics components even if the supply crunch continues.
The benchmark Nikkei average rose 0.8 percent to 9,685.77, while the broader Topix gained 0.5 percent to 841.72. "Investors remain wary about companies' forecasts this fiscal year, but because they're keeping their expectations low, the market may not fall sharply unless companies give really surprising numbers," said Yumi Nishimura, a senior market analyst at Daiwa Securities.
Foreign investors bought a net 89.5 billion yen ($1 billion) of Japanese stocks last week, staying net buyers for a third straight week although they trimmed their purchases. "There are many investors who want to hold Japanese stocks in the long-term. They still believe in recovering fundamentals which were pushing up the market before the earthquake," said Fujio Ando, senior managing director at Chibagin Asset Management. "But recent thin volume indicates their hesitance to take large positions before earnings are released."
Trading volume was low with only 1.68 billion shares changing hands on the Tokyo exchange's main board, below last week's average daily volume of 2.1 billion yen. Yaskawa, the world's biggest maker of industrial robots, dropped 2.3 percent to 863 yen. "Yaskawa is based in Kyushu, so the market had expected it to be harmed less than other manufacturers, but it actually seems to be hit pretty badly - that's a bad prognosis for firms based closer to the quake-affected areas," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Yaskawa did not give any earnings estimates for this financial year. "That's why this earnings season it's not going to be only about figures or specific sectors. We will have to take every statement separately and examine it carefully for the current output and predicted speed of recovery," said Okamoto.
But JFE Holdings Inc, which reported earnings during afternoon trade, gained 3.5 percent to 2,249 yen despite posting a big fall in quarterly profit and not providing guidance for the current year. Daiwa's Nishimura said JFE's results were within market expectations. "Also, it's not uncommon for a steelmaker to not release an annual outlook before iron ore prices are set, so all the negative news was priced in," Nishimura said.
Car parts maker Denso Corp rose 2.7 percent to 2,699 yen after J.P. Morgan raised its rating by two notches to "overweight" from "underweight", saying the company's potential to expand customers beyond Toyota Motor Corp was intact. Trading houses, miners and other commodity shares continued to shine, with Japan's biggest gas and oil developer Inpex Corp surging 3.5 percent to 622,000 yen after Brent oil jumped 2 percent to near $124 a barrel on Wednesday. Mitsubishi Corp, Japan's biggest commodities trader advanced 1.7 percent to 2,215 yen after metals rose on Wednesday and copper consolidated its previous day's 2.5 percent rally on Thursday.