* Nikkei trims gains as yen advances
* RSI over 70 signals overbuying, profit-taking emerges
By Elaine Lies
TOKYO, Dec 7 (Reuters) - Japan's Nikkei stock average rose 1
percent on Monday, helped by the dollar's surge against the yen
late last week, although it came off a five-week high as the
Japanese currency regained some ground.
Japan Airlines Corp <9205.T> gained 7 percent after a
government source said it is considering guaranteeing about 700
billion yen ($7.8 billion) in loans and other funds for the
debt-laden airline. []
Market players said the benchmark Nikkei <> had risen
about as far as it was going to on the dollar boost produced by
better-than-expected U.S. jobs data.
"There's some concern about the speed of the Nikkei's rise,
and this is leading to profit-taking," said Hideyuki Ishiguro, a
strategist at Okasan Securities.
"Given that the government's now announced some economic
policies the market's unlikely to fall much, and I'd say that
over the short-term it'd be pretty hard for the market to fall
much below 10,000. But strong gains are also unlikely."
U.S. employers cut 11,000 jobs in November, the smallest loss
since the recession began in December 2007, against market
expectations of 130,000, and the unemployment rate also dipped to
10 percent from 10.2 percent. []
"The U.S. jobs data has sparked interest in a greater range
of riskier assets, and this is sending investors back to stocks,"
said Hiroichi Nishi, general manager at the equity division of
Nikko Cordial Securities.
The Nikkei rose 97.43 points to 10,120.02 after earlier
rising as much as 1.8 percent. Last week it rose 10.4 percent on
the week, its biggest weekly gain in more than a year.
The broader Topix <> rose 0.8 percent to 896.39.
Market players said that while the jobs news had given shares
quite a boost, at the same time the strong figures fuelled
expectations that the Federal Reserve may have to start
considering raising interest rates.
GAINS MAY SLOW
"Put this together with the speed at which the Nikkei rose
last week and I think it'll be tough for it to sustain gains
above 10,200," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
With the Nikkei's 14-day Relative Strength Index above 70,
generally considered overbought territory, market players said it
could be vulnerable to profit-taking.
The dollar lost 0.7 percent, falling to 89.84 yen. <JPY=>
Exporters pared some of the morning gains made on the weaker
yen and hopes that the jobs figures point to an increasingly
strong economic recovery. Investors fret about a strong yen
because it eats into exporter profits when repatriated.
Sony Corp <6758.T> held onto gains of 1.6 percent to 2,550
yen, while Canon Inc <7751.T> gained 2.2 percent to 3,710 yen.
But Honda Motor Co <7267.T> was flat.
Token Corp <1766.T> fell 8.1 percent to 2,510 yen after the
apartment builder cut its annual forecast, citing weak demand.
The company said on Friday it now expects 1.74 billion yen in
operating profit for the year ending in April 2010, down 78
percent from its earlier forecast.
(Reporting by Elaine Lies)
