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Nikkei up 2.3 pct on US earnings hopes; Mazda soars

Published 07/15/2009, 09:34 PM
Updated 07/15/2009, 09:48 PM
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* Market receives boost from weaker yen, US earnings hopes

* Mazda shoots up on hybrid parts tie-up report with Toyota

* Worries about U.S. CIT's fate weigh on U.S. futures, Nikkei

TOKYO, July 16 (Reuters) - Japan's Nikkei average climbed 2.3 percent on Thursday, boosted by shares of high-tech exporters on a weaker yen and after results from Intel Corp lifted hopes for a rebound in technology spending.

Mazda Motor Corp surged more than 10 percent after the Nikkei business daily said Toyota Motor Corp plans to supply core components for hybrid vehicles to smaller rival Mazda.

"In addition to hopes for a recovery in U.S. corporate earnings, investors are welcoming growing signs of a recovery in U.S. economic data," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

U.S. manufacturing data suggested the recession is abating, and minutes from the Federal Reserve's most recent policy-setting meeting that showed officials judged that the U.S. economy's contraction was slowing.

The benchmark Nikkei gained 209.98 points to 9,479.23 and the broader Topix advanced 2.2 percent to 885.24.

But a fall in U.S. stock futures, partly on deepening troubles for U.S. firm CIT, a major lender to small and mid-sized businesses, put a lid on sharper gains for the Nikkei, Kuramochi said.

A U.S. Treasury official said that the Treasury and other federal agencies explored several aid solutions to rescue CIT Group from collapse, but its liquidity situation had deteriorated to the point where these became unworkable.

"Investors took media reports about CIT negatively and that weighed on U.S. futures, although its potential failure has been somewhat factored in," Kuramochi added.

Among tech exporters, Canon Inc advanced 3.3 percent to 3,130 yen and Advantest jumped 4.6 percent to 1,821 yen.

Shares of Japanese chip-related stocks such as Advantest had made some modest gains on Wednesday in the wake of Intel's results, but the Nikkei ended the day flat as investors grew cautious ahead of more earnings results.

On Wednesday, the Standard & Poor's 500 Index gained 3 percent. Intel's quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia.

Shares of Mazda surged 10.6 percent to 250 yen, while Toyota rose 2.6 percent to 3,560 yen.

The Nikkei said the components will be used in a hybrid vehicle Mazda is planning to launch as early as 2013.

In early Asia trade, the dollar was trading around 94.30 yen, up 0.1 percent. Investors welcome a weaker yen as it boosts exporters' profits when they are repatriated. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

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