(Reuters) – Japan’s Nikkei edged higher on Monday, with short-covering in exporters emerging after the benchmark marked its worst week in over a month and as a key retracement level continued to provide support.

Shares of consumer lenders such as Acom Co (8572.T) sky-rocketed, with many jumping by nearly a fifth in value after the Mainichi newspaper said Osaka prefecture may set up a special financial zone where tough new lending rules would be eased.

The market shrugged off U.S. nonfarm payrolls data that showed a loss of 125,000 jobs in June and a drop in the unemployment rate to 9.5 percent, the lowest level since July 2009, with charts showing the benchmark oversold.

In thin trade, the Nikkei rose further above support at 9,200, roughly a 50 percent retracement of the move up from its March 2009 low to its high in April.

“We’re seeing a bit of short-covering now that we’re past the jobs data, but the market is going to want to see a lot of the other indicators coming up this week, including those linked to consumer spending,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

“But if we can close above 9,200 for three straight days — Friday, today and tomorrow — we might even see a little bit of a rebound later this week.”

But others said gains were likely to be limited to Monday.

“Knowing that U.S. markets are shut today is giving some investors the assurance to buy, but we could well see a test of support at 9,076 later this week,” said Hideki Horikawa, a senior adviser at Himawari Securities.

The benchmark Nikkei .N225 rose 0.7 percent or 63.07 points to 9,266.78, while the broader Topix gained 0.7 percent to 836.89.

The Nikkei last week lost 5.5 percent, a decline that market players said underscored its oversold condition.

The Nikkei’s slow stochastic, a measure of how oversold the market is and whether it is in a short-term up or down trend, is deep in oversold territory but pointing slightly up, while its MACD, a measure of market momentum, is falling.

Its RSI is at 34, hovering near a six-week low. A figure of 30 or below would indicate that the Nikkei is in oversold territory. It is also just a bit above its lower Bollinger Band, indicating its short-term downtrend is slightly overstretched.

But there are a large number of option triggers on Nikkei futures at 9,000 and 8,500, and Horikawa said the market remains gamma short — meaning that traders need to follow market moves to hedge their books, often leading to volatile moves.

Orders placed through foreign securities houses before the start of trade showed foreign brokers were net buyers for the first time since June 21, but the amount was only 300,000 shares.

Market players said there were few signs of foreigners in the market, noting that U.S. markets are closed on Monday for a holiday, though some said the longer-term picture is not overly bleak.

“There’s a very small chance that the global economy will take a drastic turn for the worse under the current circumstances, unless something huge happens, for instance some big European bank goes under and that freezes money flows again,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

“Many in the market had already expected economic stimulus measures taken around the world would peak out around midyear. Once the market calms down and reality starts to be reflected in stock prices, the Nikkei could return to the 10,000 level.”

Trade was thin, with some 1.4 billion shares changing hands on the Tokyo exchange’s first section, not far from the four-month low marked last Monday. Advancing stocks outnumbered declining ones by nearly 3 to 1.

CONSUMER LENDERS

Shares of Acom shot up 26.2 percent to 1,444 yen. Promise Co (8574.T) gained 17.1 percent to 685 yen and Takefuji Corp (8564.T) jumped 17.8 percent to 298 yen, bouncing back from a record low hit last week.

Consumer lenders, which offer unsecured loans to individuals and small business owners, have been struggling for survival amid a shrinking market and stricter lending regulations.

Shares of exporters gained broadly after many fell to multimonth lows last week, with the dollar climbing further above a seven-month trough against the yen, on demand from Japanese importers.

Sanyo Electric (6764.T) climbed 3.5 percent to 118 yen after sources said on Friday the company is close to finalizing the sale of its chip unit to ON Semiconductor (ONNN.O), its latest move to shed noncore businesses to focus more on promising areas.

But shares of Fast Retailing (9983.T) slumped 1.8 percent to 13,190 yen after the company said on Friday that same-store sales at its Uniqlo casual-clothing chain fell 5.8 percent in June from a year earlier, the first year-on-year decline in two months.

Nomura Securities downgraded its rating on the firm to “neutral” from “buy,” citing falling domestic sales growth and its possible impact on earnings over the short-term.

(Editing by Chris Gallagher)

TOKYO, July 5 (Reuters) – Japan’s Nikkei edged higher on Monday, with short-covering in exporters emerging after the benchmark marked its worst week in over a month and as a key retracement level continued to provide support.

Shares of consumer lenders such as Acom Co (8572.T) sky-rocketed, with many jumping by nearly a fifth in value after the Mainichi newspaper said Osaka prefecture may set up a special financial zone where tough new lending rules would be eased.

The market shrugged off U.S. nonfarm payrolls data that showed a loss of 125,000 jobs in June and a drop in the unemployment rate to to 9.5 percent, the lowest level since July 2009, with charts showing the benchmark oversold. [ID:nN01165161]

In thin trade, the Nikkei rose further above support at 9,200, roughly a 50 percent retracement of the move up from its March 2009 low to its high in April.

“We’re seeing a bit of short-covering now that we’re past the jobs data, but the market is going to want to see a lot of the other indicators coming up this week, including those linked to consumer spending,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

“But if we can close above 9,200 for three straight days — Friday, today and tomorrow — we might even see a little bit of a rebound later this week.”

But others said gains were likely to be limited to Monday.

“Knowing that U.S. markets are shut today is giving some investors the assurance to buy, but we could well see a test of support at 9,076 later this week,” said Hideki Horikawa, a senior adviser at Himawari Securities.

The benchmark Nikkei .N225 rose 0.7 percent or 63.07 points to 9,266.78, while the broader Topix gained 0.7 percent to 836.89.

The Nikkei last week lost 5.5 percent, a decline that market players said underscored its oversold condition.

The Nikkei’s slow stochastic, a measure of how oversold the market is and whether it is in a short-term up or down trend, is deep in oversold territory but pointing slightly up, while its MACD, a measure of market momentum, is falling.

Its RSI is at 34, hovering near a six-week low. A figure of 30 or below would indicate that the Nikkei is in oversold territory. It is also just a bit above its lower Bollinger Band, indicating its short-term downtrend is slightly overstretched.

But there are a large number of option triggers on Nikkei futures at 9,000 and 8,500, and Horikawa said the market remains gamma short — meaning that traders need to follow market moves to hedge their books, often leading to volatile moves.

Orders placed through foreign securities houses before the start of trade showed foreign brokers were net buyers for the first time since June 21, but the amount was only 300,000 shares.

Market players said there were few signs of foreigners in the market, noting that U.S. markets are closed on Monday for a holiday, though some said the longer-term picture is not overly bleak.

“There’s a very small chance that the global economy will take a drastic turn for the worse under the current circumstances, unless something huge happens, for instance some big European bank goes under and that freezes money flows again,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

“Many in the market had already expected economic stimulus measures taken around the world would peak out around midyear. Once the market calms down and reality starts to be reflected in stock prices, the Nikkei could return to the 10,000 level.”

Trade was thin, with some 1.4 billion shares changing hands on the Tokyo exchange’s first section, not far from the four-month low marked last Monday. Advancing stocks outnumbered declining ones by nearly 3 to 1.

CONSUMER LENDERS

Shares of Acom shot up 26.2 percent to 1,444 yen. Promise Co (8574.T) gained 17.1 percent to 685 yen and Takefuji Corp (8564.T) jumped 17.8 percent to 298 yen, bouncing back from a record low hit last week.

Consumer lenders, which offer unsecured loans to individuals and small business owners, have been struggling for survival amid a shrinking market and stricter lending regulations.

Shares of exporters gained broadly after many fell to multimonth lows last week, with the dollar climbing further above a seven-month trough against the yen, on demand from Japanese importers.

Sanyo Electric (6764.T) climbed 3.5 percent to 118 yen after sources said on Friday the company is close to finalising the sale of its chip unit to ON Semiconductor (ONNN.O), its latest move to shed noncore businesses to focus more on promising areas. [ID:nTOE66105C]

But shares of Fast Retailing (9983.T) slumped 1.8 percent to 13,190 yen after the company said on Friday that same-store sales at its Uniqlo casual-clothing chain fell 5.8 percent in June from a year earlier, the first year-on-year decline in two months.

Nomura Securities downgraded its rating on the firm to “neutral” from “buy”, citing falling domestic sales growth and its possible impact on earnings over the short-term. (Editing by Chris Gallagher)