The stock market in Japan ended higher on Wednesday, led by positive cues from the Wall Street ended higher as all the major indices showed strength and ended in positive territory despite weaker economic data and gloomy outlook for the near future. Speculation that the U.S. administration might allow the major U.S. automakers to fail enthused the Asian counterparts as they expect their market share in the U.S. to increase in the short term. The weakening of the local currency against the U.S. dollar also lifted the sentiment, offsetting the weak economic data released by the Tankan Survey.
On Tuesday, the Dow closed up 86.90 points or 1.2% at 7,609, the Nasdaq closed up 26.79 points or 1.8% at 1,529 and the S&P 500 closed up 10.34 points or 1.3% at 798.
In Asian trading, crude oil declined 2.15% or $1.07 at $48.57 a barrel, in electronic trading. Light sweet crude for May delivery closed at $49.66 per barrel on the New York Mercantile Exchange on Tuesday, up $1.25 a barrel, after hitting an intraday high of $50.00 and a low of $47.77, amid weaker U.S. dollar, as traders await the weekly inventory report from the U.S. Energy Information Administration.
In Tokyo, the benchmark Nikkei 225 Index gained 2.99% or 242.38 points to 8,532, and the broader Topix Index of all First Section Issues rose 20.16 points to 794.
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%.
Exporters ended higher on the back of a weaker yen. Canon advanced 2.66%, Sony rose 6.36% and Sharp gained 2.58%. Among automakers, Toyota moved up 4.86% and Honda added 6.70%.
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.
In the banking sector, Mitsubishi UFJ, Japan's biggest bank, moved up 3.99%, and Sumitomo Mitsui advanced 2.93%, while Resona Holdings lost 0.53%.
Oil-related stocks are trading higher following the overnight gain in crude oil price. Inpex added 3.81%, Nippon Oil gained 4.52% and Showa Shell advanced 3.91%.
Meanwhile, trading house Mitsubishi Corp. gained 5.99%, Sumitomo Corp. added 2.73% and Itochu advanced 3.56%.
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