Japan's Nikkei average hit a new nine-month peak on Tuesday, extending gains for a third straight day as investors pile into riskier assets in developed economies on hopes for a steady economic recovery.
Japan, the best-performing Asian market this year with a gain of around 4 percent, has benefited from a shift into developed markets and strong earnings for October-December.
Thomson Reuters Starmine data shows 61 percent of Nikkei 225 firms that have released their results have met or beaten analysts' expectations for the latest quarter. The data was collected before the market closed. Toyota Motor Corp's earnings released after the bell were better than analysts expected. It reported a 47.6 percent drop in quarterly profit, hit by slumping Japanese car sales and a firm yen, but lifted its annual operating profit forecast to 550 billion yen ($6.68 billion) from a cautious 380 billion yen, as profit for the first nine months topped the original figure. A survey of 23 analysts by Thomson Reuters I/B/E/S forecast annual operating profit of 489 billion yen for Toyota.
For October-December, Toyota's operating profit was 99.07 billion yen, down from 189.1 billion yen a year earlier and beating an average estimate of 70.6 billion yen in a poll of nine analysts by Reuters.
The Nikkei's advance has also been helped by weakness in Chinese mainland markets, which have been jittery about the risk of further monetary tightening and reopen on Wednesday after the weeklong Lunar New Year holiday.
The benchmark Nikkei ended up 0.4 percent or 43.94 points at 10,635.98. It rose as high as 10,648.80, its highest since May 6. The broader Topix added 0.4 percent to 944.00.
The Nikkei has gained 4.0 percent so far in 2011. The Standard & Poor's 500 Index has added 4.9 percent, while Asian stocks outside Japan are nearly flat.
Recent gains on the Nikkei have been underscored by decent trading volume. Around 2.14 billion shares changed hands on the Tokyo Stock Exchange's main board on Tuesday, in line with last week's average of 2.2 billion.
Sentiment also brightened after merger activity drove the Dow Jones industrial average and the Standard & Poor's 500 Index to their highest in two and a half years on Monday and UBS raised its 2011 target for the S&P by 7.5 percent to 1,425, citing an improving outlook for the economy and earnings.