Nikkei edges higher

The Nikkei average edged higher on Wednesday, helped by relief that US retail sales had not fallen as much as feared, but gains were capped at its 13-week moving average and volume remained low in a sign investors lack conviction about the economic outlook.
Honda Motor rose, extending its rebound from a two-month low hit on Tuesday, despite forecasting a worse-than-expected 65 percent fall in annual operating profit as market players thought the company's outlook was too conservative and that bad news is already priced in.
Tokyo Electric Power Co soared for a second day after a government scheme to help it compensate those affected by the radiation crisis at its Fukushima Daiichi nuclear plant received cabinet approval and Tokyo Stock Exchange imposed higher margins for margin traders.
The benchmark Nikkei rose 0.3 percent to 9,574.32, its best close in two weeks, and the broader Topix index gained 0.2 percent to 824.65. The Nikkei faces immediate resistance at 9,591, its 13-week moving average, which it has failed to overcome twice in May, and its 200-day moving average of 9,833. Many market players doubt it can break above these points.
"The Japanese economy is dependent on foreign demand, and expectations of more tightening in emerging economies, which have been driving the economy, are keeping gains in check," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Honda climbed 2.0 percent to 2,990 yen and was the third most actively traded stock by turnover on the main board. Hino Motors jumped 4.4 percent to 453 yen after the truck maker said it expects an operating profit of 35 billion yen ($435 million) for the year ending in March, above Thomson Reuters Starmine's SmartEstimate of 28.5 billion, on the back of a recovery in the domestic truck and bus market and growing demand in emerging countries.
Shares in Tokyo Electric, known as Tepco, which have been the target of speculative trading, were the most active both by turnover and volume as short-sellers covered their positions.
The Tokyo bourse on Tuesday raised the margin for margin trading in Tepco by 20 percentage points to 50 percent, fanned perceptions that short-sellers may be forced to close their positions in the near future. Shares in Tepco rose after the bourse imposed the same restriction on April 8.
Tepco jumped 32 percent to 319 yen on Wednesday, taking its gain to 65 percent in two days, with its trade accounting for nearly one-fifth of first-section volume. Advancers outnumbered decliners by 825 to 663.