TOKYO, June 20 - Japanese stocks ended Friday morning trade mixed, with a rebound by Mizuho <8411.T> and other megabanks and continued aggressive buying by foreign investors helping Tokyo partially buck a drop on Wall Street. But gains were limited, with Sony Corp <6758.T> and other exporters falling after a disappointing manufacturing report tempered hopes for an imminent U.S. economic recovery. Traders expect the Nikkei average <.N225> to hold the psychologically key 9,000 line, however, with foreign buying and lingering hopes for aggressive easing by the U.S. Fed next week providing support. The Nikkei ended the morning session down 0.14 percent at 9,097.81. The benchmark index rose 0.19 percent on Thursday to 9,110.51, its third straight winning session and the highest close since December 3. The broader TOPIX index <.TOPX> was up 0.23 percent at 897.74, as investors weighed several trading incentives.
"The drop in New York affected Tokyo early on, but we've been supported by another round of strong foreign buying and a calming down of the JGB market," said Tatsuyuki Kawasaki, director of equities trading at Kaneyama Securities. Major exporters were hit in morning trade by a report that said manufacturing in the U.S. Mid-Atlantic region had not picked up as much as some investors had expected, helping send the Dow Jones industrial average <.DJI> down 1.23 percent on Thursday. Sony, the world's largest consumer electronics maker, was down 1.41 percent at 3,490 yen, while Nissan Motor Co Ltd <7201.T>, Japan's third-largest automaker, was down 2.06 percent at 1,096 yen. But bank shares rebounded after being hit hard by a steep fall in Japanese government bond prices on Thursday. Mizuho Financial Group, the world's largest bank by assets, was up 4.54 percent at 94,500 yen, while Japan's fourth-largest bank UFJ Holdings <8307.T> was up 3.23 percent at 160,000 yen.
The fall in JGB prices, part of a worldwide bond market downturn, had stoked fears that Japan's banks, which are heavy buyers of bonds, faced a new threat to their weak balance sheets. "The JGB dive was a big shock to the market, but we can largely read yesterday's drop in bank shares as investors having used it as an opportunity to take profits," said Zenshiro Mizuno, senior managing director at Marusan Securities.//