Nikkei ends 4-day rally, logs best weekly gain since Feb

Nikkei slipped today as investors lacked fresh incentives to buy

Japan's Nikkei share average fell on Friday as investors lacked fresh incentives to buy, but the index still marked its biggest weekly gain since February following a four-day rally spurred by hopes for more global stimulus.

The Nikkei lost 1% to 8,891.44 points but advanced nearly 4% up on the week, its biggest gain since mid-February, after surfing a wave of short-covering triggered by better-than-expected US jobs figures last week.

Online gaming company DeNA Co Ltd soared 22.1%, its biggest-ever one-day jump, on strong results, while Sharp Corp scrambled up 9.4% on a short-squeeze after dropping as much as 34% early this week after revising down its full-year guidance.

"This week's rally was entirely fueled by speculation of stimulus, so concern about a global slowdown retreated," said Yoshihiro Ito, chief strategist at Okasan Online Securities.

"But now people are beginning to question what's coming up, and with the holidays and a poor earnings season the Nikkei lacks the power to pierce 9,000."

However, analysts said that the risk aversion that reigned through July was ebbing as disappointing data from China and the Bank of Japan's refusal to budge on policy on Thursday only spurred hopes for further easing in the imminent future.

"Nothing is actually improving but the bad state of the US and Chinese economies is priced in now," said Ryota Sakagami, chief strategist of equity research at SMBC Nikko.

"If data shows things aren't as bad as assumed then it's a plus, and yet if they're worse than assumed people expect easing or stimulus, which is also a plus."

Amid a weaker market on Friday, a handful of companies saw gains on the back of strong results as Japan's earning season drew to a close, including Taiyo Yuden Co Ltd <6976.T>, which climbed 10.3% af t er its earnings beat expectations.

DeNA Co Ltd <2432.T> jumped after its solid quarterly results calmed fears that revenue had been hit by the withdrawal of its lucrative "complete gacha" game due to pressure from regulators. The news helped competitor Gree Inc <3632.T> gain 8.1%.

Japan's quarterly earnings season has been relatively weak, with 53% of the 142 Nikkei companies having undershot market expectations, compared with 40% in the previous quarterly earnings season, data from Thomson Reuters StarMine showed.

Yamada Denki Co Ltd bounded up 7.9% despite posting a 73.8% year-on-year decrease in operating profit for the April-June quarter, as brokerages said sales had been distorted due to the switch to digital from analogue televisions.

"With the earnings season now over, investors will be looking to the economic indicators out next week as a measure of business confidence," said Masayuki Doshida, senior market analyst at Rakuten Securities.

The Bank of Japan cut its assessment on exports and output on Thursday as Japanese firms feel the pressure from slowing global growth, but followed the US Federal Reserve and the European Central Bank in deciding to hold fire on policy changes.

The broader Topix dropped 0.7% to 746.79.

Sony to pick up so-net

Sony Corp ended up 2.7% after climbing as much as 5.6% after it said on Thursday it plans to buy all the shares it does not already own in So-net Entertainment, an internet provider and medical information website operator, for about 60 billion yen.

So-net shot up 21.1% to 402,000 yen, while the news also awarded a 6.5% gain for M3 Inc , a marketing company and a listed subsidiary of So-net.

Against the strength of competitors DeNa and Gree, Japanese online game provider Nexon Co Ltd  sank 24.5% after the company cut its full-year operating profit guidance by 9.9% to 47.1 billion yen.