(Adds stocks and comments)
By Taiga Uranaka
TOKYO, May 16 (Reuters) - Japan's Nikkei stock average rose
0.2 percent on Friday, extending gains into a fifth day as stocks
tracked overnight gains on Wall Street, led by exporters such as
Honda Motor Co Ltd <7267.T>.
Stocks pared earlier gains as investors locked in profits and
technical charts suggested the market may be overheated, with the
Nikkei dipping into negative territory at one stage.
Still, many market participants said the Tokyo market
remained on a solid upward trend as pessimism about the economic
outlook recedes.
"The investment environment is improving. Many see the market
as very strong," said Yoshihiro Ito, managing director at Okasan
Asset Management.
"This week, we are seeing buying interest beyond rewinding of
short positions. Money is flowing back to the equity market from
safety assets like bonds."
The benchmark Nikkei <> ended the morning up 21.97
points at 14,273.71. The broader TOPIX index <> rose 0.7
percent to 1,402.23.
Investors had worried about Japanese companies' earnings
outlooks this year, which were expected to project sharp profit
declines due to a stronger yen and surging raw materials costs.
But they have taken heart as the dollar hovers around 104
yen, which many have found comfortably above firms' forecasts.
"With the dollar at the current level and given that many
companies' outlooks are based on 100 yen, there is the
possibility of an upward revision of profit forecasts," said
Kenichi Hirano, operating officer at Tachibana Securities.
Honda Motor rose 2.9 percent to 3,520 yen. Toyota Motor Corp
<7203.T> gained 0.7 percent to 5,420 yen.
MIZUHO JUMPS
Mizuho Financial Group <8411.T> leapt 3.4 percent to 555,000
yen after Japan's second-largest bank said it aimed to buy back
up to 400 billion yen ($3.8 billion) of its own shares in the
current year.
The bank booked its first quarterly loss in five years on
Thursday, hit by a $2.9 billion subprime meltdown at its
brokerage unit, but forecast a rebound. []
Other banks also climbed, with No.1 Mitsubishi UFJ Financial
Group <8306.T> up 2.9 percent at 1,111 yen and Sumitomo Mitsui
Financial Group <8316.T> rising 2.7 percent to 887,000 yen.
The market also got a boost from shippers after the chief sea
freight index <.BADI> soared to a record high on demand for
natural resources in China and India, and congestion at key ore
and coal export terminals.
Nippon Yusen KK <9101.T> gained 2.2 percent to 1,105 yen,
Mitsui OSK Lines Ltd <9104.T> climbed 4.4 percent to 1,650 yen
and Kawasaki Kisen Kaisha Ltd <9107.T> rose 4.5 percent to 1,244
yen.
Trade picked up, with 1.1 billion shares changing hands
compared to the 933 million morning average last week.
Decliners outnumbered advancers 833 to 767.
(Editing by Brent Kininmont)
