Nikkei climbs

Japan's Nikkei average rose 1.2 percent after hitting a 16-month low on Wednesday, drawing support from a halt in the rapid advance in the yen on a manufacturing rebound in China and stronger-than-expected growth in Australia. Market players said other help came from a slight spike in dollar/yen after news that Japanese political powerbroker Ichiro Ozawa, challenging Prime Minister Naoto Kan in a party leadership vote.
In a policy statement he would implement steps including currency intervention if the yen rose rapidly. The benchmark Nikkei ended up 102.96 points at 8,927.02, after earlier falling as low as 8,796.45, its lowest since April 2009, helped by what some market players said was buying by domestic institutional investors at lows. The broader Topix added 0.8 percent to 811.40.
China's official purchasing managers' index rose to 51.7 in August from a 17-month low of 51.2 in July, while Australia's economy grew a stronger-than-expected 1.2 percent in the second quarter. Shortly after the opening the benchmark fell below 8,800 for the first time in 16 months, with market players saying sentiment remained fragile with investors worried about possible negative surprises from a slew of US indicators due out this week, including jobs data.
ADP private employers data is due out later on Wednesday, with non-farm payrolls on Friday. The next technical level for the Nikkei if it resums falling is 8,697, a 61.8 percent retracement of the rally from its March 2009 low to its April 2010 high. Shares of Hitachi Ltd climbed 2.4 percent to 348 yen after sources familiar with the matter said the company is planning an initial public offering of its hard-drive unit in the United States, possibly by the year-end.
Shares of companies with strong businesses in China gained, with Hitachi Construction up 1.9 percent at 1,700 yen and Komatsu rising 1.2 percent to 1,726 yen. Tech shares that were sold sharply on Tuesday, such as Canon Inc, crawled higher, but some blue chip shares hit multimonth lows on persistent worries about the strong yen's impact on their earnings. Toyota Motor Corp ended down 0.1 percent at 2,857 yen after falling as low as 2,806 yen, its lowest in about 17 months.
Toshiba Corp was down 2 percent at 387 yen after hitting its lowest in 13 months and Sharp Corp was down 0.9 percent at 797 yen after touching its lowest in 17 months. Some 1.6 billion shares changed hands on the Tokyo exchange's first section, its highest volume this week, albeit light. Advancing shares outnumbered declining ones 862 to 649.