* Nikkei flirts with 200-day MA after 2-week high, backs off
* Weaker yen, higher commodities prices bolster Nikkei
* Property shares jump on Goldman Sachs upgrades
* Market awaits U.S. payrolls data
By Chikafumi Hodo and Antoni Slodkowski
TOKYO, April 1 (Reuters) - Japan's Nikkei average began a
new financial year with a small gain on Friday, running out of
steam after hitting a key technical resistance level, with
investors piling back into property shares seen as oversold.
Portfolio managers said gains were limited as investors
wanted to lighten recently built positions ahead of the weekend
and before the release of U.S. payrolls data later in the day.
Japan's stock market took heart from a softer yen and
strength in shares of trading houses and oil companies such as
Japan's biggest oil and gas developer Inpex Corp , due
to rallies in commodities prices the previous day.
In afternoon trade the benchmark Nikkei climbed as
high as 9,822.06, hitting its 200-day moving average and the
highest level since a panic sell-off on March 14, when trade
resumed after the earthquake and tsunami.
The Nikkei was supported by follow-through buying on a
weaker yen, after posting solid gains over the last two
sessions.
It backed off to 9,775.27, up 0.2 percent from Thursday's
close, while the broader Topix was little changed at
869.32.
"The Nikkei has been pretty volatile recently. But now the
market's focus is on U.S. jobs data tonight before deciding what
to do next," said Shoji Yoshigoe, deputy general manager at
Mitsubishi UFJ Morgan Stanley Securities.
"The Nikkei is supported by shares related to commodities
and resources," Yoshigoe said.
Still, Japanese stocks drew support after the yen slipped to
a fresh three-week low against the dollar. The dollar traded at
around 83.60 yen .
"Considering that today is the start of the new financial
year we saw some solid buying at the beginning, but the market
turned careful about extending purchases," said Kazuhiro
Takahashi, general manager at Daiwa Securities.
"PARTICULARLY BULLISH"
Shares in Japan's two biggest publicly traded property
firms, Mitsubishi Estate Co and Mitsui Fudosan Co
, jumped over 3 percent after Goldman Sachs said in a
report that property shares were oversold on post-quake
concerns.
The brokerage reinstated its "buy" rating for Mitsubishi
Estate, adding it to its conviction list, and upgraded Mitsui
Fudosan to "buy" from "neutral".
Despite the rebound, Mitsubishi Estate and Mitsui Fudosan
are still 11-12 percent below pre-quake levels after being sold
on worries over rent declines, planned outages and delays in
handovers of condominiums
"We are particularly bullish on Mitsubishi Estate and Mitsui
Fudosan, which we see as undervalued," said Analyst Sachiko
Okada, adding that quake-affected areas account for very little
of the firms' profit.
OIL SHARES, TRADERS, TEPCO
Shares in Japan's biggest oil and gas developer, Inpex Corp
, and other oil-related companies extended solid gains
made after the earthquake, as the price of oil hit a 2-1/2-year
high on Thursday on ongoing supply threats due to turmoil in
Libya and the Middle East.
Inpex jumped 4.3 percent to 658,000 yen in heavy trade. It
has surged nearly 20 percent since the quake, while the
benchmark Nikkei has lost more than 7 percent in the same
period, as the disaster spurred demand for oil and gas products
amid a shortage of energy supplies.
Trading houses advanced after the Reuters-Jefferies CRB
index , a measure of 19 mostly U.S. commodity futures,
finished the first quarter with a strong 8.0 percent gain as
global economic improvement began to take hold.[]
Marubeni , Japan's No.5 trader, rose 2.5 percent to
614 yen, while second-ranked Mitsui Co Ltd climbed 1.7
percent to 1,516 yen in heavy trade.
Shares of Tokyo Electric Power Co (TEPCO) plunged
7.3 percent to 421 yen and closer to the all-time low of 393 yen
after advancing shortly after the opening.
The Mainichi newspaper, quoting an unnamed government
official, said on Friday the Japanese government was planning to
inject funds into the utility but was unlikely to take more than
a 50 percent stake in it.[]
Traders said TEPCO shares are mainly driven by short-term
speculators, trying to take advantage of massive volatility in
the shares since the earthquake.
"TEPCO is not a normal share any more," said a trader at a
Japanese brokerage house.
"But more than fundamental factors, speculators are simply
flocking into TEPCO shares and trading them aggressively, taking
advantage of extremely heavy volatility," he said.
(Additional reporting by Hideyuki Sano; Editing by Michael
Watson)
