Japan stocks rise on US auto bailout hopes

The benchmark Nikkei 225 stock average rose 264.37 points, or 3.2 percent, to 8,660.24 for its third straight day of gains. The broader Topix index added 2 percent to 834.55.

On Tuesday, Democratic congressional leaders and White House officials agreed in principle on a $15 billion bailout of U.S. automakers.

The tentative accord would give the government extraordinary power to restructure the industry, whose failure would deal a heavy blow to the U.S. economy and exporting countries like Japan who rely on American consumer spending.

Shares of Japan's big three automakers surged on the development. Honda Motor Co. jumped 10.3 percent to 2,035 yen, Toyota Motor Corp. advanced 6.6 percent to 2,930 yen, and Nissan Motor Co. closed up 5.2 percent at 344 yen.

Electronics firms also gained, despite Sony announcing Tuesday that it plans to slash 4 percent of its global workforce and news Wednesday that core machinery orders--a key barometer of corporate capital spending--fell sharply in October.

"Japanese companies are all in trouble because of this unexpected worldwide slowdown," said Kazuharu Miura, electronics analyst at Daiwa Institute of Research in Tokyo.

Sony gained 1.1 percent to 1,917 yen, and Canon Inc. gained 3.6 percent to 2,770 yen.

In currencies, the dollar was trading at 92.71 yen from 92.22 yen. The euro stood at $1.2977 from $1.2922.

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