The Japanese stock market was trading higher on Wednesday, tracking the overnight gains on Wall Street and a weaker yen. Investors brushed aside the Bank of Japan's quarterly Tankan Survey results, which revealed that the sentiment among Japan's large manufacturers plummeted at a record rate in the first quarter of 2009.
In early morning trades, the benchmark Nikkei 225 Index was gaining 83.40 points, or 1.03%, to 8,192.93 and the broader Topix Index of all First Section Issues was adding 12.04 points, or 1.56%, to 785.70.
Overnight, U.S. stocks closed higher on the last day of the quarter, led by technology stocks and bank shares, as traders used the weakness in the two previous sessions as a buying opportunity. The gains were also helped by window dressing, or buying stocks that make quarter-end statements look good late in a quarter. Investors mostly shrugged off separate economic reports that showed weakness in home prices, consumer confidence and in a purchasing managers index.
Crude oil closed higher on Tuesday amid choppy trading, tracking the gains on Wall Street. Light sweet crude for May delivery ended at $49.66 on the New York Mercantile Exchange, up $1.25 for the session.
The Japanese market closed lower on Tuesday as investors preferred to offload shares on the last trading day of the fiscal year and ahead of the Tankan Survey slated to be released Wednesday. The Nikkei 225 Index declined 126.59 points or 1.54% to close at 8,110.
In the currency market, the U.S. dollar was trading in the upper 98 yen-range on Wednesday. In early morning trades, the dollar was quoted in a range of 98.66-98.70 yen, up 0.36 yen from Tuesday's close of 98.30-98.32 yen in Tokyo.
On the economic front, the Bank of Japan's Tankan Survey revealed on Wednesday that the sentiment among Japan's large manufacturers plummeted at a record rate in the first quarter of 2009, posting a score of -58. That was worse than analyst expectations for -55 following a score of -24 in the previous quarter. It was also worse than the previous record low of -57 in 1975. The large manufacturers' outlook for the June quarter came in at -51. The non-manufacturing index saw a score of -31, worse than forecasts for a -25 after posting -9 in the previous quarter. The outlook for the June quarter came in at -30. Large companies also saw capital expenditure down an annual 6.6% for the fiscal year, while pretax profit is expected to fall 19.7%.
In the banking sector, Mitsubishi UFJ, Japan's biggest bank, is gaining 2.10%, Mizuho Financial is adding 0.52% and Sumitomo Mitsui is advancing 2.05%. Resona Holdings is adding 0.38%. Brokerage Nomura Holdings is up 3.03%.
Exporters are trading higher on the back of a weaker yen. Canon is advancing 1.24%, Sony is up 3.10% and Sharp is adding 0.13%. Among automakers, Toyota is gaining 1.28% and Honda is rising 4.32%.
Honda said Tuesday that it will cut North American production further, reduce the pay of its salaried employees in North America and force its hourly workers to take unpaid leave, as vehicle sales continue to plunge. The company will reduce output by 62,000 units over three months starting May 1, 2009.
Electronics maker Panasonic, which is in the process of acquiring Sanyo Electric, has asked the three financial institutions that own a majority of Sanyo's shares to retain some of their holdings, the Nikkei business daily reported. Shares of Panasonic are up 1.12%, while those of Sanyo Electric are down 2.74%.
Oil-related stocks are trading higher following the overnight gain in crude oil price. Inpex is adding 1.32%, Nippon Oil is gaining 1.85% and Showa Shell is advancing 1.90%. The Nikkei business daily reported that Showa Shell has entered into talks to buy a plasma panel plant from Hitachi with an aim to turn it into a solar cell plant. Shares of Hitachi eased 0.38%.
Meanwhile, trading house Mitsubishi Corp. is rising 2.96%, Sumitomo Corp. is adding 1.19% and Itochu is advancing 1.88%.
Online shopping mall operator Rakuten officially ended its pursuit of Tokyo Broadcasting System on Tuesday by asking the TV broadcaster to buy back the TBS shares currently owned by Rakuten. Rakuten now stands to incur several tens of billions of yen in investment losses by selling back the stock, while TBS will need to cough up a large amount of cash to make the purchase. Shares of Rakuten are gaining 2.86%, while those of TBS are up 4.58%.
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