Nikkei ends up 1.8 percent

Japan's Nikkei average climbed 1.8 percent on Thursday to bounce back from a three-week closing low, with investors encouraged by a rebound in Chinese shares and gains in resource shares after crude oil surged. Truckmakers' shares climbed after a brokerage upgrade, with Isuzu Motors adding 5.4 percent, and trading houses gained on strong metals prices.
Investors took heart after the Shanghai Composite Index jumped more than 3 percent after falling to its lowest close in two months on Wednesday. That drop had led the Nikkei to book its lowest close since late July. Despite Thursday's bounce, however, analysts said the market is ripe for a correction after the Nikkei's gains of more than 40 percent from its March lows, with some saying investors had likely used the drop in Chinese stocks as an excuse to lock in profits.
"Sentiment is still fragile as both Japanese and US stocks are in a natural corrective phase," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. In moderate trade, the benchmark Nikkei rose 179.41 points to 10,383.41, while the broader Topix gained 1.6 percent to 958.59. Chinese shares had slid 4.3 percent on Wednesday as nervous investors pulled out on worries that a 20 percent slide in just two weeks would deepen further.
Most in the market said they felt Japan's dip this week was probably still within the range of a natural fluctuation, with support set to hold around 10,100 - roughly where the 25-day moving average comes in. Energy shares powered higher after oil's surge on Wednesday when US government data showed a steep drop in crude imports and inventories, though crude steadied on Thursday.
The surprising drop in stockpiles lifted Wall Street on views it could suggest an improving demand outlook and economy, but analysts said higher prices were a two-edged sword. Oil and gas field developer Inpex gained 2.9 percent to 721,000 yen, while distributor Nippon Oil rose 1.9 percent to 531 yen. Trading houses rose on both the oil gains and a recovery in metals prices, with Marubeni climbing 2.8 percent to 474 yen and Itochu Corp adding 2.2 percent to 665 yen.
Isuzu and Hino Motors shot up after Nikko Citigroup upgraded them to "hold" from "sell", saying truckmakers' earnings could turn around in the second half of the business year on better overseas demand than the companies had originally foreseen. Isuzu climbed to 197 yen and Hino Motors advanced 5.1 percent to 391 yen. Advancing stocks outnumbered declining ones by nearly 5 to 1.