The Nikkei average rose for the first time in six sessions on Wednesday, adding 0.44 percent as Toyota Motor Corp and some other exporters gained as a drop in crude oil prices helped allay concerns about decreased consumer spending in the key US market.
Hoya Corp advanced on strong earnings, but shares of Yahoo Japan Corp slid after its US counterpart, Yahoo Inc, disappointed investors with its revenue outlook. "The drop in oil prices and the attendant rebound in US stocks helped boost expectations for the Tokyo market," said Toshihiko Matsuno, an assistant general manager of investment research at SMBC Friend Securities.
The Nikkei finished 63.02 points higher at 14,500.26. The benchmark had lost more than 7 percent over the previous five sessions. The TOPIX index edged up just 0.01 percent to 1,475.42. US crude oil futures dropped to $73.50 a barrel in New York on Tuesday, their lowest level in six sessions. In Asian trade, crude remained close to that level.
Higher energy prices are a negative for Japan's exporters because they crimp consumer spending, especially in the key US market. Toyota, the world's second-largest auto maker, rose 0.9 percent to 5,620 yen. Electronics and entertainment giant Sony Corp advanced 1.1 percent to 4,670 yen. Glass maker Hoya finished up 4.5 percent at 3,710 yen after its first-quarter profit came in above market expectations.
But Yahoo Japan dropped 5.2 percent to 52,800 yen, becoming one of the biggest percentage losers on the Nikkei 225.The company's US counterpart issued a 2006 revenue outlook below Wall Street forecasts, sending its shares down 10 percent after the bell. Softbank Corp, which owns 41 percent of Yahoo Japan, also declined. Softbank lost 3.7 percent to 1,900 yen.
Even after the drop in oil prices and a rebound in US shares - two positives for Japanese stocks - investors were still finding it difficult to push the market higher, SMBC's Matsuno and other analysts said.
While many investors initially thought that Japanese corporate forecasts were on the conservative side, there may be few positive surprises from first quarter earnings results, said Yoshihisa Okamoto, senior vice president at Fuji Investment Management.
Investors in Japan were looking ahead to several events due during US trade, including earnings from tech bellwether Intel Corp, US Federal Reserve Chairman Ben Bernanke's testimony before Congress and the release of June US consumer price data. Japanese share prices could come under pressure if the data or Bernanke's comments strengthen expectations the Fed will raise interest rates in August.
Shares of JS Group Corp rose 2.9 percent to 2,160 yen after the maker of building materials on Tuesday lifted its forecasts for the six months to September, citing better-than-expected progress in cost cutting.
Kenedix Inc, a unit of US property firm Kennedy-Wilson, jumped 8.2 percent to 423,000 yen. The company on Tuesday revised up its annual dividend forecast to 2,500 yen per share from 1,500 yen.
Trade edged down from the previous session, with 1.84 billion shares changing hands on the Tokyo exchange's first section. That was still above last week's daily average of 1.67 billion shares. Decliners outnumbered gainers 975 to 642.
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