Tokyo shares end morning off lows on short covering

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TOKYO (Thomson Financial) - Japanese shares ended the morningsession off lows on Monday on short-covering mainly in bankingstocks such as Mizuho Financial Group following 12 straight days of declines on the Nikkei index.
'A technical rebound can occur any time soon, but the upside may becapped as there is a lack of incentives to buy stocks amid theexpected global economic slowdown and rising oil prices, ' saidYoshikiyo Shimamine, chief economist at Dai-Ichi Life ResearchInstitute.
Stocks opened lower as investors retreated to the sidelines due tolingering worries about high crude oil prices and their impact onthe global economy.
But the losses were limited by a stable yen. The dollar was lastquoted at 107.02 yen, up from the 106.72-75 yen levels late Friday.
Trading was thin throughout the morning session on caution ahead ofthe G8 summit meeting starting Monday, and with no leads comingfrom Wall Street which was closed last Friday for the American Independence (nasdaq: AMIC - news - people ) Day holiday.
The Nikkei 225 Stock Average ended the morning marginally down 8.43points at 13,229.46, off a low of 13,169.55.
The broader Topix edged down 0.35 points to 1,297.53.
Decliners outnumbered gainers 954 to 621 with 127 issues unchanged.
Volume rose to 755 million shares from 958 million shares on Fridaymorning.
U.S. crude oil futures rose above $144 a barrel on Monday, stayingnear record levels, on intensifying tensions between Iran and theWest over Tehran's nuclear programme.
Crude oil rose 20 cents from Friday to $144.05 a barrel in Globexelectronic trading this morning, below an all-time high of $145.85hit on Thursday.
Mizuho Financial gained 1.9 percent to 492,000 yen, after openingweaker. Mitsubishi (other-otc: MSBHY.PK - news - people ) UFJ Financial rose 0.8 percent to 944 yen, while Mitsui SumitomoFinancial Group was up 0.9 percent at 783,000 yen.
Other financial and property stocks were also firmer, with generalleasing firm Orix up 1.6 percent at 14,850 yen and Mitsui Fudosanup 1.3 percent at 2,315 yen.
Steel issues trimmed earlier losses. Nippon Steel (other-otc: NISTF.PK - news - people ) fell 0.4 percent to 545 yen after falling to as low as 535 yen.Sumitomo Metal Industries declined 1.2 percent to 495 yen and JFEHoldings lost 1.2 percent to 4,990 yen.
Construction machinery maker Komatsu declined 1.4 percent to 2,795yen and machine tool manufacturer Okuma was down 5.9 percent at 959yen.
Mitsui Chemicals Inc rose 1.7 percent to 490 yen. The Nikkei dailyreported over the weekend that the petrochemical producer has shutone of its three production lines for high-purity terephthalicacid, the key ingredient for making polyester fiber, at a factoryin Yamaguchi Prefecture.
Kawasaki Heavy Industries fell 2.5 percent to 273 yen after areport that the heavy machinery maker and engineering company willabandon its plan to build an industrial robot plant because ofweaker demand from its main customers in the automobile andchipmaking industries.
($1 = 107.02 yen)
masami.hachisu@thomsonreuters.com

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