Nikkei average rises

The Nikkei average rose 1.5 percent on Thursday, helped by strong US durable goods orders that sent auto stocks surging and by a retreat in the yen from last week's record high but worries over the world economy mean the benchmark may easily resume its downtrend.
The benchmark has fallen around 11 percent so far this month, hitting a 5-month low on Monday and some market players say it could slump again if Federal Reserve Chairman Ben Bernanke fails to offer a clear hint of further monetary easing in his speech on Friday at the US mountain retreat of Jackson Hole.
The benchmark Nikkei rose 1.5 percent in active trade to 8,772.36, moving away from a 5-month low of 8,619 hit on Monday. The broader Topix index added 1.3 percent to 751.82. Laggard auto stocks such as Nissan Motor and Fuji Heavy Industries soared after US durable goods orders last month were buoyed by a 14.6 percent jump in bookings for transportation equipment, the largest increase since January. The yen also appeared to have stopped strengthening for now, trading at 76.87 yen per dollar, off a record high of 75.97 yen hit last week.
Nissan shares rose 7 percent to 673 yen but even so it has still lost 18 percent this month. Fuji Heavy climbed 7.3 percent to 468 yen although it remains down 25 percent for the month. Attractive valuations were also providing a floor for the market. "The PBR for Japanese shares is around 0.92, the lowest level since the Lehman shock. But unlike 2008, there's limited risk of book value becoming further impaired. And companies are generating cash flows" said Fumiyuki Takahashi, chief strategist at Barclays.
Some of that cash flow is going into share buybacks, with generic drugmaker Nippon Chemiphar jumping 4.9 percent to 300 yen and Bank of Yokohama climbing 2.5 percent to 368 yen on buyback announcements. Still, worries about whether the global economy is losing momentum - a scenario that few market players and companies were contemplating until a few weeks ago - continue to hang over world equity markets.
"Upcoming US data is likely to show more signs of a slowdown and CDS premiums for US and European banks remain high," said Okasan Securities' Ishiguro. Although panic selling in global shares seems to have abated, foreign investors continue to sell Japanese shares, becoming net sellers of Japanese shares for a fourth straight week last week.
Some 2.1 billion shares changed hands on the Tokyo stock exchange's main board, compared with last week's average daily volume of 1.7 billion shares. Advancing shares outnumbered declining shares by 1,092 to 458. Among decliners, Japanese mobile gaming firm DeNA dropped 1.4 percent to 3,530 yen after a technical glitch hurt some services.