Japan's Nikkei average rose 0.2 percent on Monday to hit a six-month closing high, rebounding from an earlier dip as financials such as Mizuho Financial Group advanced on optimism about the US banking system and the economy. But Toyota Motor Corp, the world's biggest automaker, slid 4.8 percent after forecasting a much bigger-than-expected $8.6 billion annual loss.
Financial shares extended gains made last week as regulators said most US banks were sound. US jobs data on Friday added to optimism about the US economy. The 539,000 jobs cut by employers in April was the smallest reduction since October, and hinted at some improvement in the US labour market. "Continued gains in financial sector shares helped offset downward pressure from export-related stocks, such as automakers," said Soichiro Monji, chief strategist at Daiwa SB Investments.
"Foreign investors who had previously refrained from purchasing Japanese stocks are emerging as buyers as the outcomes of the US stress tests and Japanese corporate earnings releases have not been as bad as some feared," Monji said. The benchmark Nikkei rose 19.15 points to 9,451.98, its highest close since November 5. In choppy trading, the index momentarily rose above 9,500 but also fell as much as 1 percent.
It had gained over 900 points, or roughly 11 percent, over the previous four trading days. The broader Topix climbed 0.6 percent to 900.45. Market players said caution over a slew of corporate earnings releases due this week capped gains. Nissan Motor Co, Sony Corp and Mizuho Financial Group are due to report later in the week. "The recent market gains need to be kept in perspective.
The rise is being driven by hopes that the worst is over for the economy, but we may still need more solid evidence from economic indicators," said Fumiyuki Nakanishi, manager at SMBC Friend Securities. Shares of Toyota, the world's biggest automaker, lost 4.8 percent to 3,790 yen.
For January-March, the automaker booked a $6.9 billion loss, in line with consensus estimates, and cut its annual dividend by nearly 30 percent - the first cut since at least 1994, when it changed its reporting period. Other automakers also fell. Honda Motor Co shed 1.7 percent to 2,900 yen and Nissan Motor Co dropped 2.1 percent to 515 yen.
Shares of Bridgestone Corp, Japan's largest tyre maker, tumbled 7 percent to 1,451 yen after it widened its operating loss forecast for the six months ending in June to 40 billion yen from 12 billion yen, citing falling sales due to the weak economy and a strong yen.
But Japan's banking subindex advanced 2.5 percent. Mizuho climbed 5.7 percent to 260 yen and top lender Mitsubishi UFJ Financial Group rose 2.9 percent to 674 yen. Nomura Holdings Inc, Japan's biggest brokerage, gained 2.6 percent to 713 yen. Takeda Pharmaceutical Co, Japan's biggest drugmaker, rose 3 percent to 3,800 yen after it said its fourth-quarter profit more than doubled thanks to contributions from newly consolidated US firms, but forecast weaker-than-expected growth this year.
Takeda shares fell as much as 1.4 percent at one stage before the announcement. Japanese opposition leader Ichiro Ozawa has told his party he will resign, media reported after the market closed on Monday, after an opinion poll showed a funding scandal involving a close aide was clouding his party's prospects in a looming election.
But Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities in Tokyo said there would be "very little" impact on the stock market. Trade was moderate on the Tokyo exchange's first section, with 3 billion shares changing hands, in line with last week's daily average. Advancing stocks outnumbered declining ones, 966 to 605.