Nikkei up

Japan's Nikkei average edged up 0.21 percent on Tuesday as strong earnings helped KDDI Corp to rebound, while investors chased after laggards such as Mizuho Financial Group and other bank shares. After the market closed, Nissan Motor Co, Japan's third-biggest automaker, posted a 3.2 percent drop in quarterly operating profit as a product mix favouring smaller, cheaper cars hit margins.
But it kept its full-year forecasts unchanged. Shares of real estate fund KK DaVinci Advisors fell after its $850 million hostile bid for TOC Inc ended in failure.
The dollar fell to a two-month low against the yen partly on worries about the US subprime mortgage market, but exporters such as Canon Inc remained firm, helping the Nikkei to eke out gains. "Many companies have assumed a dollar/yen rate of 115 yen when drawing up forecasts. Investors may get worried if the yen strengthens to 117 yen or so, but it's trading at 120 yen and there still seems to be a buffer," said Shinji Igarashi, equity manager at Chuo Securities.
The benchmark Nikkei average added 38.39 points to 18,002.03. On Monday it fell 1.07 percent to finish at 17,963.64, its lowest close since June 28. The broader TOPIX index added 0.50 percent to 1,765.99. Trade volume slowed with 1.96 billion shares changing hands, below average daily volume of 2.3 billion shares in June as investors held back amid a slew of quarterly earnings results.
Advancers outpaced decliners 1,002 to 600. Tsuyoshi Nomaguchi, a strategist with Daiwa Securities Co Ltd's Japanese equity research, said volume will likely pick up next week with investors focusing on certain sectors. "The problem right now is weak Japanese consumption and the US housing market," he said. "Any sectors that have little exposure to these areas should perform fine."
Shares in KDDI rebounded from heavy losses in the past two sessions and jumped 4.8 percent to 870,000 yen after the company posted a 15.6 percent gain in quarterly operating profit on Monday. Bank shares drew buyers looking for discounted stocks. The banking subindex IBNKS.has lost 6 percent so far this year, while the shipping sector jumped 56 percent and steel surged 35 percent.
Mizuho rose 2.2 percent to 857,000 yen and Sumitomo Mitsui Financial Group added 1.8 percent to 1.12 million yen. Among gainers, Japanese consumer lender Sanyo Shinpan Finance Co Ltd jumped 6.5 percent to 3,420 yen on a Nikkei newspaper report that it is expected to agree as early as Thursday to be acquired by Promise Co.