Barefoot Investor: Japan News Recap: Nikkei at 2-wk high, banks rally on Morgan, Greece deal

 * Firms reporting next week up after strong US, Japan
* Volumes pick up, suggest more upside risk before earnings
* Euro-sensitive shares gain on euro bounce
* Nikkei seen facing resistance seen at 10,207
Tokyo stocks climbed to a two-week high on Friday, led by banks that jumped on Morgan
Stanley's strong results and euro-sensitive issues such as Canon , up on the euro's 
gains after officials agreedon steps to solve Greece's debt woes. 
Individual investors as well as domestic institutional players dominated the market, 
participants said, adding that concerns about the yen's renewed strength against 
the dollar had capped gains. 
"Watch volumes on banks. This is still mostly long-term investors who previously 
owned the stock re-establishing positions, but we're also seeing some new buyers 
piling into these shares," said Takashi Ohba, a senior strategist at Okasan
The Nikkei rose 1.2 percent to 10,132.11, its highest close since July 8 and 
adding 1.6 percent for the week. The broader Topix rose 1 percent to 868.81. 
The benchmark on Friday jumped above resistance at 10,005, which was its tenkan
line on its daily Ichimoku cloud. 
"More firms posted earnings above expectations yesterday, defying worries over 
supply chains. That's why firms posting results next week are charging higher 
today," said a trader at a foreign brokerage who did not want to be quoted by 
Canon Marketing jumped 5.9 percent after hiking its profit forecast, while 
Tamron Co soared 7.0 percent to 1,971 yen, after the company lifted its net 
profit outlook and Nomura Securities upgraded the stock to "buy".  
"After these hikes and stronger-than-expected results from Wall Street, 
everyone is looking at firms reporting next week such as Toshiba and Komatsu," 
the trader said. 
Construction machinery maker Komatsu Ltd added 1.4 percent to 2,539 yen, 
while electronics conglomerate Toshiba Corp , already in favour this week 
after Apple Inc's strong earnings, gained 2.0 percent to 419 yen.     
Most investors are long in the market, suggesting sentiment towards Japanese 
stocks is overwhelmingly positive. 
"The Japanese equities long-short ratio reached an annual high of 12.28 on 
July 14. This denotes that there are over 12 times more longs than shorts 
in the market as institutional ownership in the region is close to annual 
highs," research firm 
Data Explorers said in a note to clients.   
Morgan Stanley wowed Wall Street on Thursday with results that far surpassed 
expectations, while an emergency summit of leaders of the 17-nation euro 
zone pledged on Thursday to conduct a second bailout of Greece.
These factors helped banks continue their relief rally into a fourth straight
day, with the sector subindex rising to a two-week high. They were led by 
Mitsubishi UFJ Financial Group , Japan's largest bank by assets, climbing 3.3 
percent to 407 yen in active trade. 
Goldman Sachs also said on Thursday that Japanese lenders were likely to 
report earnings consensus for the first quarter of this fiscal year in line 
or above the market's consensus, adding to banks' rally. The brokerage said Mitsubishi UFJ is its
top pick. 
"People are turning a bit more bullish, because you need financials to really 
push the whole market higher. Forget about any decent rally when that sector 
lags others," said Okasan's Ohba. 
He adds that banks' advance may help the Nikkei pop above its post-quake high 
of 10,207.91 heading into the earnings season next week. 
Banking shares were one of the worst-hit sectors after the March 11 disaster 
because of speculation that they may have to forgive some of their loans to 
Tokyo Electric Power Co , which is still struggling with the Fukushima 
radiation crisis. 
MUFG's shares are still down 8 percent from where they were before the 
earthquake. The bank shares subindex has fallen 11 percent since then, 
compared with a 2.9 percent fall in the Nikkei. 
Canon, which obtains about one third of its sales in Europe, rose 1.3 percent 
to 3,785 yen and Nikon, another euro-sensitive stock, gained 1.4 percent 
to 1,857 yen after the euro rose to a two-week high against the Japanese 
currency on Thursday. 
Volumes picked up with 1.8 billion shares changing hands on the main board, 
higher than this week's daily volumes of around 1.5 billion shares.(Reuters) 


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