So much for the morning rally. An S&P upgrade of Japan’s long-term credit rating one notch to “AA” from “AA-” resulted in buying of yen, and the rest is no surprise, selling of exporters and sustained weakness in domestic oriented and smaller-cap stocks. The Nikkei finished 2.75 points (0.02%) higher to 17,455.37 (range: 17,413.64 - 17,656.55). Nikkei 225 futures in Osaka gained 0.40% to 17,480 (range: 17,420 - 17,680). TOPIX 1st Section lost 4.44 (0.26%) to 1,705.63 (range: 1,701.59 - 1,726.36), as decliners outpaced advancers 1,093 x 525 (111 unchanged). The Nikkei Shimbun reports 244 stocks established new lows, versus 181 on Friday and only 43 that reached new highs. TOPIX 2nd Section fell for an 8th straight session, the longest losing streak since an 11-day span last September. JASDAQ fell 1.08% to 78.50 (range: 78.25 - 79.20).

HOYA’s (JP: 7741) earnings failed to impress (a possible case of expectations being too high … and it being first up to bat in earnings season) and so its shares subsequently lost 3.4% to ¥3,980. Let’s see if bearishness continues a second day following its release.

Kao’s (JP: 4452) earnings missed estimates — the stock may pullback and depending on how much, may present some entry points for longer-term investors.