Japan's Nikkei rose on Wednesday for a second straight day, boosted by gains in companies that provided positive outlooks for the current business year such as Orix Corp and NEC Corp , while investors largely shrugged off slightly stronger-than-expected inflation data from China.
The market was also bolstered by resilient commodity shares, gained despite a brief drop in Brent crude prices after Chinese output and loan data hinted at slowing demand. Orix gained 4 percent and NEC jumped almost 5 percent after predicting rises in their net profits for the current business year. Many Japanese companies have failed to provide annual forecasts following the massive earthquake on March 11. The benchmark Nikkei average closed up 0.5 percent at 9,864.26, while the broader Topix gained 0.1 percent to 857.62.
The Nikkei stayed above its 200-day moving average, now at 9,823, which has become an immediate support level. Volume was moderate, with 2.1 billion shares changing hands on the Tokyo Stock Exchange's main board, slightly above Tuesday's 1.9 billion shares. After the closing bell, Toyota Motor Corp posted a 52 percent fall in quarterly operating profit and gave no annual forecasts as it struggles to measure to scope of the ongoing disruption to production after the March 11 earthquake.
China's headline consumer price inflation slowed to 5.3 percent in the year to April from 5.4 percent in March, the National Bureau of Statistics said on Wednesday, but that was still higher than expected. Some market players, however, said the Nikkei may target key psychological resistance at 10,000, though it may not be able to stay there unless there are favourable indications on how companies performed in the first quarter and how quickly they get back to normal after the March 11 disaster. Japanese shares have dropped about 5 percent since the quake, while Asian stocks outside Japan have gained about 8 percent in the last two months.
Foreigners have been net buyers of Japanese stocks for the past 26 weeks, according to data released by the TSE, encouraged by strength in overseas equities. Commodity shares such as oil stocks and mining shares outperformed on rising oil and gold prices.
Inpex added 1 percent to 584,000 yen and Japan Petroleum Exploration rose 1.7 percent to 3,935 yen. NEC soared 4.7 percent to 177 yen after the firm forecast a 56 percent rise in operating profit to 90 billion yen in the business year to March 2012, beating an average estimate of 69.7 billion yen from six analysts who had updated their forecasts in the last 30 days, according to Thomson Reuters I/B/E/S. Orix gained 4 percent to 8,020 yen in active trade after the company forecast net profit this financial year to rise 15 percent to 77.5 billion yen ($959 million). Declining shares outpaced advancing ones by 845 to 645.