Nikkei hits one-week high

Japan's Nikkei share average climbed to a one-week high on Friday, rising above the key threshold of its 25-moving average after smooth European debt auctions prompted buying of exporters, while the market remained on edge ahead of US corporate earnings. Exporters with exposure to Europe were in demand as the euro gained against the yen after successful Italian and Spanish debt sales eased investor concern of an immediate credit crunch.
Canon rose 3.1 percent and Konica Minolta Holdings gained 1.7 percent. "The market is temporarily rebounding but the fundamental problems in the euro zone still remain. Nobody knows how long the euro will continue to climb against the yen," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The Nikkei average rose 1.4 percent to 8,500.02, closing above its 25-day moving average near 8,475, while the broader Topix advanced 1.1 percent to 734.60. The euro climbed to 98.68 against the yen, off an 11-year low hit recently. Trading volume on Tokyo's main board rose to 1.69 billion shares, up from 1.39 billion the previous day, due to settlement of January options contracts in a so-called "SQ" special quotation. The Osaka Securities Exchange said after the close that Nikkei options were settled at 8,470.71. Honda Motor Co was the biggest gainer on Tokyo's core 30 list, which closed at a four month high. The firm gained 3.4 percent to 2,553 yen on a legal victory for its US unit after an appeals court threw out a nation-wide lawsuit over a brake system used in some of its vehicles.
Rival automakers also outperformed the market, with Toyota Motor Co gaining 1.6 percent and Nissan Motor Co up 2.5 percent on the euro's gains. Japan's top oil and gas explorer Inpex Corp added 1.2 percent after it gave the go-ahead for the $34 billion Ichthys liquefied natural gas export project in Australia, in which it has a 73 percent stake. Among engineering firms involved in the project, JGC Corp climbed 3.9 percent and Chiyoda Corp gained 3.1 percent.
Market participants said that their immediate focus had shifted from the debt turmoil in Europe to US corporate earnings. Masayuki Otani, chief market analyst at Securities Japan, said investors would like to see the extent of Europe's impact on US banks when they report earnings, starting with J.P. Morgan Chase & Co on Friday.