The stock market in Japan ended higher on Monday, led by exporters and automakers after the local currency, the Japanese yen, weakened to a 5-month low above the 100-mark against the U.S dollar.

Growing optimism among market participants that the worst of the global economic crisis is over and the initiatives of the governments will yield positive results in the near term drove the market higher. Positive closing by Wall Street on Friday, and comments by Fed Chairman Ben Bernanke that the initiatives taken up to unclog the credit markets are beginning to yield positive results also lifted the market sentiment. However, financial stocks pared their early gains and dragged the indices lower following a media report that they might post losses for their fiscal year ended March 2009 on rising bad loan reserves and devaluation of assets.

On Friday, the Dow closed up 39.51 points or 0.5% at 8,018, the Nasdaq closed up 19.24 points or 1.2% at 1,622 and the S&P 500 closed up 8.12 points or 1% at 842.

In Asian trading, crude oil gained 1.79%, or $0.94, at $53.45 a barrel in electronic trading. Light sweet crude for May delivery closed down $0.18 at $52.46 a barrel on the New York Mercantile Exchange on Friday after dismal employment report fueled concerns over energy demand.

In Japan, the benchmark Nikkei 225 Index gained 1.02% or 108.09 points to close at 8,886. However, the broader Topix index of all First Section Issues pared gains and shed 0.39 points or 0.01% to close at 831.

A report in the Nikkei newspaper on Saturday stated that the government will subsidize purchases of eco-friendly vehicles such as hybrids, also attracted buying interest among the automakers. Among the automakers, Toyota advanced 1.08% and Isuzu Motors rose 8.59%. However Honda edged down 1.26%.

Exporters advanced on weaker yen. Canon gained 1.63%, Sony added 1.04% and Sharp rose 4.68%. However, Trading houses slipped on profit taking, Mitsubishi Corp. lost 0.61%, Sumitomo Corp. edged down 0.11% and Itochu fell 1.14%.

Oil stocks ended higher. Inpex advanced 4.92%, Showa Shell gained 2.19% and Nippon Oil edged up 0.92%.

Banks stocks pared back most of their early gains and ended mixed in reaction to the report that forecast losses for the year. Mitsubishi UFJ lost 2.47%, Mizuho Financial edged down 0.49%, and Sumitomo Mitsui declined 1.37%. However, Resona Holdings bucked trend and edged up 0.45%. Brokerage Nomura Holdings fell 0.85%.

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