The Nikkei share average rose 0.43 percent on Tuesday as Canon Inc and other blue chip shares gained on hopes for strong earnings ahead. Brokerage firms and other financial stocks gained, helping the broader TOPIX index end above 1,600 for the first time in a month.
Aeon Co Ltd climbed as a source told Reuters that it would revise up its operating profit forecast, while Orix Corp jumped after Goldman Sachs added the stock to its buy list, helping the non-financial sector IFINS.advance.
"What's bolstering the market is expectations for higher profits," said Zenshiro Mizuno, senior managing director at Marusan Securities Co Ltd's equity trading division. "The market has also reached a level where retail investors take profits in one issue and buy in another" generating activities and lifting the overall market, he added.
Toru Otsuka, deputy general manager of Mizuho Investors Securities Co's investment information department, agreed. The TOPIX index was up 0.58 percent at 1,602.43, holding above 1,600 for the first time since June 2. Canon, a digital camera maker, was the biggest contributor for the Nikkei's rise, climbing 3.4 percent to 5,740 yen. Canon said last month that its camera division may top its forecast for a 46 percent surge in profit for the first half thanks to strong sales of new models.
Japan's second-biggest retail group Aeon rose 1.8 percent to 2,615 yen after a company source said the firm will post an over 10 percent rise in its quarterly net profit to around 13 billion yen on improved core supermarket operations. But Lawson Inc, Japan's second-biggest convenience store chain, posted a 15.6 percent fall in its quarterly profit after the market closed, due to sluggish sales at existing stores. Lawson kept its full-year outlook.
The auto sector remained firm as Renault SA and Nissan Motor Co Ltd prepared to start talks with General Motors Corp about a three-way alliance that would create the world's largest auto group. Otsuka of Mizuho Investors Securities said it was still early to say what the impact would be on the auto industry.
Nissan edged up 0.5 percent to 1,263 yen and Toyota Motor Corp, the world's most profitable automaker, was up 0.8 percent at 6,010 yen. Goldman Sachs ratings moved some stocks. Leasing company Orix jumped 5.2 percent to 29,440 yen after Goldman added the stock to its buy list and set a target price of 35,900 yen. The stock has come under pressure, hitting this year's low of 25,520 in June due to Orix's investment in a fund led by Yoshiaki Murakami who has been indicted for insider trading.
In brokerages, Daiwa Securities Group Inc, Japan's second-biggest brokerage, rose 3.5 percent to 1,444 yen after it said on Tuesday it would enter the security-backed lending business for individual clients. Bigger rival Nomura Holdings Inc was up 2.1 percent at 2,230 yen.
Trade was relatively slow, with 1.56 billion shares changing hands on the Tokyo exchange's first section. That compared to last year's daily average of 2.07 billion shares. Advancers beat decliners by a ratio of more than two to one.
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