The Nikkei average edged up 0.1 percent on Thursday, with exporters such as Toyota Motor Corp buoyed by hopes that Japan's economy may have seen its worst phase. But gains were capped by the previous day's climb in US Treasury yields, which fuelled concern over rising corporate borrowing costs, and by caution over the possible bankruptcy of automaker General Motors.
Wigmaker Aderans Holdings fell 7.5 percent to 1,008 yen, becoming the largest percentage loser on the Nikkei 225, after shareholders accepted a proposal for new management chosen by the company's largest shareholder, US activist fund Steel Partner. "The Nikkei may be struggling to make further headway, but it stands on strong support following recently released encouraging economic indicators," said Soichiro Monji, chief strategist at Daiwa SB Investments. "For example, Japan's exports finally appear to have gone through their worst phase," Monji said.
Among major exporter shares, Toyota Motor Corp climbed 2.7 percent to 3,800 yen, and Canon Inc rose 0.6 percent to 3,190 yen. The benchmark Nikkei rose 12.62 points to 9,451.39 after a slight drop earlier in the day. The broader Topix gained 0.3 percent to 895.59.
The market was awaiting Friday's April industrial output numbers, which economists expect to rise for the second consecutive month as manufacturers ramped up production after working down inventories. "The industrial output figures are widely expected to be good, and this is making investors reluctant to sell today given that tomorrow could see strong gains depending on the numbers," said Masayoshi Okamoto, head of trading at Jujiya Securities.
In what some took as a sign that production was recovering, the Nikkei business daily said on Thursday that steelmaker Nippon Steel planned to raise its capacity utilisation rate from the current 50 percent to 60 to 70 percent as early as July on expectations of a recovery in demand from carmakers and others.
Increased production at automakers would also benefit companies connected to copper and other non-ferrous metals, and Sumitomo Metal Mining gained 6.1 percent to 1,356 yen, while other smelters of non-ferrous metal advanced as well. Mitsubishi Materials gained 5 percent to 315 yen, and Dowa Holdings rose 1.7 percent to 419 yen. The non-ferrous metals sub-index rose 3.2 percent to become one of the biggest gainers among the sub-indexes.
Nippon Steel gained 1.4 percent to 357 yen and autos followed, with Honda Motor Co gained 2.4 percent to 2,785 yen. The autos sub-index rose 2.7 percent, becoming the second-biggest gainer among the sub-indexes. Oil and gas field developer Inpex climbed 3.1 percent to 730,000 yen after Nomura Securities raised its rating on the company to "buy" from "neutral" and hiked its target price to 900,000 yen from 710,000 yen, with the brokerage assuming higher crude oil prices and a weaker yen.
Japan Tobacco slipped 6.9 percent to 267,200 yen after an official from Japan's largest opposition party told Reuters in an interview that it would raise tobacco taxes with the goal of halving the number of smokers nation-wide if it wins the next election.
Data released by Japan's Ministry of Finance on Thursday showed that foreign investors bought a net 5 billion yen of Japan stocks during the week ended May 23, after selling a net 139.8 billion yen the week before. Trade was active, with some 2.2 billion shares traded on the Tokyo exchange's first section compared with last week's daily average of 2.1 billion. Advancing shares outpaced declining ones 942 to 621.
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