Nikkei rises after Fed cut, but faces resistance at 23,000

By Hideyuki Sano
TOKYO, Oct 31 (Reuters) - Japan's Nikkei edged higher on
Thursday after the U.S. Federal Reserve cut interest rates, but
the market faced tough resistance as investors were eager to
lock in profits after stellar gains this month.
The Nikkei share average .N225 ended up 0.37% at 22,927.04
points, but stayed below a one-year intraday high of 23,008
touched earlier this week, with many investors keen to sell
around 23,000.
It gained 5.4% in October, its best monthly performance
since September last year.
The broader Topix .TOPX inched up 0.07% to 1,667.01, and
the turnover surged to 2.712 trillion yen, about 20% above the
annual average.
The market showed scant reaction to the Bank of Japan's
decision to modify its forward policy guidance by offering a
stronger signal it may cut interest rates in future.
Instead, traders took cues from gains on Wall Street after
the Fed cut interest rates as expected. "The Fed's rate cut has reassured markets. But that alone
has not made a good reason to chase the upside further," said
Masayuki Doshida, senior market analyst at Rakuten Securities.
Some investors were turning cautious as the Fed signalled
there would be no further reductions unless the economy
soured. Upbeat earnings boosted some shares.
Sony 6758.T rose 4.1% to 18-year highs after the company
posted estimate-beating record profits for the second quarter
thanks to robust sales of image sensors. System developer SCSK 9719.T rose 8.4% to 18-year highs on
strong earnings while drugmaker Shionogi & Co 4507.T gained
4.5% on strong sales of its HIV drugs.
Autoparts maker Aisin Seiki 7259.T jumped 12.5% after the
firm said it plans to merge operations with its group firm Aisin
AW.
Others had less luck with semi-conductor making machine
maker Advantest 6857.T tumbling 8.8% despite solid earnings.
Analysts said a pullback had been inevitable given the stock had
risen as much as 66% since its previous quarterly earnings on
hopes of a recovery in the semi-conductor sector.
Similarly, manufacturer of 5G telecommunication equipment
parts Anritsu 6754.T fell 4.2% and many other chip-related
shares were soft.
Oriental Land 4661.T also dropped 3.2% as its quarterly
earnings came below market expectations.
Internet service firm Cyberagent 4751.T fell 12.3% after
its annual profit estimate for the current financial year fell
short of analysts' forecasts.
Despite the gain in the indexes, decliners outnumbered
advancers by a 11-9 ratio, with cyclical sectors such as
securities brokerages .ISECU.T and shippers .ISHIP.T leading
the losses.