Nikkei bounces back from 2-week low, earnings boost 7&i Hldgs

Last Updated: Fri, Jan 13, 2017 10:55 hrs

TOKYO -Japanese shares bounced back from two-week lows on Friday, with retailer Seven & i Holdings surging after posting strong earnings.

The Nikkei share average rose 0.5 percent in morning trade, bouncing back from two-week low hit on Thursday hit after U.S. President-elect Donald Trump's news conference produced no details on his stimulus plans.

The broader Topix index rose 0.3 percent to 1,540.44.

"Economic fundamentals are supporting share prices. The economy looks pretty good and we could see a recovery in earnings," said Soichiro Monji, chief strategist at Daiwa SB Investments.

Domestic economic sentiment has also shown a recovery.

A government survey published on Thursday of service-sector workers, closely watched for their proximity to real-time economic activities, showed their sentiment staying at 1 1/2-year highs.

Analysts' forecasts for Japanese companies' profits outlook have been improving in the last few months thanks to the yen's decline following Trump's surprise election victory.

According to I/B/E/S, analysts' forecast of Japanese companies' profits rose 3.6 percent over the past three months.

The earning season will begin in earnest later this month but retailers and some other firms with different financial year period are already starting to announce their results this week.

Retailer Seven & i Holdings jumped 8 percent after it posted strong earnings, putting Japan's second biggest retailer on course for a record annual profit.

Fast Retailing, the operator of Uniqlo casual clothing chain, rose 1.2 percent after it posted its biggest quarterly operating profit in two years as a cost-cutting drive and gains from a weaker yen helped offset tepid demand at home.

On the other hand, Seibu Holdings dropped 4.7 percent following the news that U.S. private equity firm Cerberus Capital Management launched a selldown of up to $308 million in railway firm.

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