TOKYO: Japan's Nikkei average rose on Friday for the first time in four days, as a sharp pullback in oil prices calmed concerns that a recent surge could derail the global recovery and nudged investors back towards riskier assets.
Despite this week's weakness, market players said bulls were waiting to buy on dips as the factors that fuelled a 14 percent rally by Tokyo's lagging stock market since November -- excess liquidity and stronger corporate earnings - remain intact.
"Foreign investors are buying back shares but it's still early days and we need to wait to see what happens in Libya over the weekend to be able to say whether or not the correction is already over," said Toshiyuki Kanayama, a market analyst at Monex Inc.
Brent crude oil sank to around $113 a barrel from 2-½ year highs near $120, dragged down by an unsubstantiated rumour that Libyan Leader Muammar Gaddafi had been shot and Saudi Arabia's assurances it can counter Libyan supply disruptions.
"Markets will remain jittery about North Africa for some time yet, but it seems as if more and more players look at the unrest as an opportunity to buy shares cheaply," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The Nikkei added 0.7 percent, or 74.05 points, to 10,526.76, led by blue-chip exporters as the yen stabilised below three-week highs hit on Thursday. For the week, it lost some 300 points, or 2.9 percent despite climbing to a 9-½-month high on Monday.
The broader Topix rose 0.8 percent to 941.93.
Continued worries about further contagion to bigger oil exporters such as Saudi Arabia were expected to keep the Nikkei under pressure in the near term.
And others noted domestic institutional investors are likely to lock in profits before the end of the fiscal year in March.
"On top of lingering concerns about unrest in the Middle East, trading may be slow and weak in March, and the Nikkei may drop as low as around 10,000," said Hikaru Sato, a senior technical analyst at Daiwa Securities Capital Markets.
WORRY AND OPPORTUNITY
Toyota Motor Corp rose 2.2 percent to 3,755 yen in heavy volume after Credit Suisse upgraded it to "outperform" from "neutral" and raised its target price to 4,520 yen, citing the ability to continue cutting costs, according to a report obtained by Reuters.
The upgrade offset news that Toyota was recalling nearly 2.2 million more vehicles for a defect that could cause gas pedals to stick.
Elpida Memory Inc rose 6.4 percent to 1,216 yen after the world's No. 3 maker of DRAM computer memory said on Thursday it wanted to hike chip prices.
Elpida Chief Executive Yukio Sakamoto said the price of some DRAM chips may rise by almost one-fifth because demand is likely to exceed supply by the second quarter as client inventories dropped and customers started placing new orders.
Ajinomoto Co, Japan's largest seasonings maker, extended gains and was 3.3 percent higher at 937 yen after saying it aimed to raise its operating profit by 26 percent by the year starting in April 2013 as it ramps up its business overseas.
Advancing shares numbered 1,178, while declining shares were 356.
Volume was slightly lower, with 2.14 billion shares changing hands on the Tokyo stock exchange's main board. This week's average daily volume was 2.37 billion, slightly higher than the last week's average daily volume of 2.26 billion.
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