* Nikkei takes aim at biggest one-day gain in six months
* Foreign investors tiptoe back in, but still nervous
* MACD makes bullish cross
By Elaine Lies
TOKYO, June 3 (Reuters) - Japan's Nikkei average surged over
3 percent to a two-week high on Thursday and took aim at its best
one-day performance in six months, with foreign investors
tentatively re-entering the market and technical signs turning
brighter.
Exporters such as Canon Inc <7751.T> rose as the yen weakened
against the euro and after investors rushed back into U.S.
stocks, having decided that a battering the previous day had gone
too far. Kawasaki Kisen <9107.T> and other shippers also gained.
But some wariness persisted towards the euro zone's debt
crisis and uncertainty over Japan's political situation a day
after the prime minister said he was resigning.
"Today's gains are strong, better than I expected, but I
think this alone isn't enough to really give investors confidence
that the market has hit bottom for now," said Toshiyuki Kanayama,
market analyst at Monex Inc.
"Still, Wall Street responded positively to good U.S. housing
data, which may be a sign that attention is shifting away from
Europe after a long period in which indicators were ignored in
favour of euro zone issues. We'll know better after we see the
response to tomorrow's jobs data."
The benchmark Nikkei <> was up 286.21 points at 9,889.45
in midafternoon after hitting 9,908.94, its highest in two weeks,
and taking aim at its best one-day performance in six months.
The broader Topix <> rose 2.2 percent to 889.36.
In orders placed before the opening, foreign investors were
net buyers to the tune of 600,000 shares, the first time in
roughly seven trading days that they had been net buyers.
Kanayama said that one key point for the Nikkei will be
9,900, the level of a February low. The benchmark surged briefly
above that in early afternoon trade on Thursday, and managing to
rise and stay above it on Friday could be one signal that the
recent correction is over.
The next level will be psychological resistance at 10,000,
followed by the Nikkei's 25-day moving average, which currently
comes in around 10,200.
In another positive sign, the Nikkei's MACD turned bullish
after turning bearish in mid-April.
"The gain by U.S. stocks is the main driver behind today's
market bounce. The yen also continues to edge down against the
euro and dollar, which is encouraging stocks to be bought back,"
said Shoji Yoshigoe, a senior investment strategist at Mitsubishi
UFJ Morgan Stanley Securities.
"That is not to say concerns toward the euro zone have ebbed.
The situation continues to be watched with caution following the
recent rise in Spain's short-term yields."
The resignation of Prime Minister Yukio Hatoyama on Wednesday
in a bid to revive his party's flagging support did not have a
big impact on Tokyo stocks, but the market was keeping a watchful
eye as the ruling party geared up to pick a new leader on Friday.
Many expect fiscally conservative Finance Minister Naoto Kan
to become the next prime minister. But analysts say it is not
definite, making it difficult for investors to factor in.
Automakers got an extra lift after U.S. industrywide sales
climbed 19 percent in May from a year earlier. In addition,
Australian new vehicle sales hit a record high for May.
[] []
Toyota Motor Corp <7203.T> rose 3.7 percent to 3,350 yen and
Nissan Motor Co <7201.T> gained 4.7 percent to 672 yen.
Honda Motor <7267.T> gained 4.1 percent to 2,825 yen after
its parts factory in south China resumed full production on
Wednesday after more than two weeks of disruption.
[]
(Additional reporting by Shinichi Saoshiro; Editing by Chris
Gallagher)
