Nikkei rebounds from 1-month low; BOJ awaited

Published 19-06-2015, 07:40 am
Nikkei rebounds from 1-month low; BOJ awaited

* BOJ board members' stances on Kuroda's view focused - analysts

* Foreigners' Japanese stock holding hits record level in March

By Ayai Tomisawa

TOKYO, June 19 (Reuters) - Japan's Nikkei share average rebounded from a one-month low on Friday as buyers took advantage of recent dips, but trade was cautious ahead of a Bank Of Japan policy decision and its governor's comments after the meeting.

The Nikkei share average .N225 rose 0.7 percent to 20,131.95 points by mid-morning after dipping below the 20,000-mark for the first time since mid-May.

At the two-day meeting ending on Friday, the BOJ is expected to maintain its massive asset buying programme and pledge to increase base money at an annual pace of 80 trillion yen ($650 billion). ID:nL3N0Z41FS

Analysts said that although the market recovered from a drop on the previous day, it could still be volatile depending on the outcome of the BOJ meeting.

"We need to keep an eye on how board members comment on Kuroda's view," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.

Some board members have openly challenged Kuroda's view that the massive stimulus is working, including Takehiro Sato, who said the programme has become less effective in pushing down long-term interest rates.

"A widely expected view is that the BOJ gives no surprises. But if another member opposes easing, the stock market may be hit," Fujito said.

Exporters rebounded, with Honda Motor Co 7267.T rising 1.6 percent and Panasonic Corp 6752.T gaining 1.2 percent.

Seven & i Holdings 3382.T soared 2.7 percent after the Nikkei business daily reported that the supermarket operator likely logged an operating profit of around 81.5 billion yen ($655 million) for the March-May quarter, the record first-quarter profit.

Market sentiment was also supported by data showing strong foreigners' appetite in the Japanese market.

According to the Tokyo Stock Exchange, foreigners held a record 31.7 percent of Japanese stocks as of March, the end of the last fiscal year.

"Foreign investors were attracted to Japanese stocks mainly because of their recovering fundamentals," said Shingo Kumazawa, an analyst at Daiwa Securities, adding that more foreign buying is expected in the coming months on the back of stronger shareholder returns and Japan's first corporate governance code which came into effect this month.

The broader Topix .TOPX rose 0.9 percent to 14,721.18 and the JPX-Nikkei Index 400 .JPXNK400 also advanced 14,722.84.

(Editing by Kim Coghill)

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