Nikkei Hits 4-Month Closing High, Oil Shares Rise

The Japanese earnings season is well under way, with Toyota Motor Corp scheduled to announce its results and outlook on Thursday.

Japan's Nikkei average rose 0.4 percent on Wednesday to a four-month closing high as resource-related shares such as Inpex Holdings and trading houses like Mitsubishi Corp jumped on record high oil prices.

The market rose sharply at the start of trade following a four-day weekend but briefly slipped into negative territory in the afternoon as investors were quick to pocket profits.

The Nikkei's gains took it to 19.6 percent above a recent bottom touched on March 17 with pessimism receding about global financial turmoil.

"The market's mood has changed. We are past the worst, but it's too early to be fully optimistic," said Noritsugu Hirakawa, strategist at Okasan Securities.

"Gains since March 17 were also fast paced, and investors are tempted to take profits."

The benchmark Nikkei ended up 53.22 points at 14,102.48, after climbing as high as 14,208.67.

The broader TOPIX index gained 1.2 percent to 1,393.28.

The Japanese earnings season is well under way, with Toyota Motor Corp scheduled to announce its results and outlook on Thursday.

So far, about a quarter of companies listed on the Tokyo stock exchange's first section have reported.

Together, they forecast a 2.6 percent decline in recurring or pretax profit for the year ending in March 2009, against a 4.7 percent gain for the year just ended, data by Shinko Research Institute shows.

"With this year's profit outlook seen from flat to a 5 percent decline, it's hard to drive the market further up," said Yoshikiyo Shimamine, chief economist at Dai-Ichi Life Research Institute.

"We need to see some factors to boost corporate earnings, such as the yen sliding further against the dollar."

INPEX JUMPS

Oil and gas field developer Inpex jumped 13.3 percent to 1.28 million yen, the biggest percentage gainer on the Nikkei, after the price of oil shot to a record above $122 a barrel on Tuesday.

Oil producer and refiner Nippon Mining Holdings Inc shot up 7.2 percent to 671 yen.

Trading houses that have stakes in overseas oil fields also gained, with Mitsubishi Corp up 6.7 percent at 3,500 yen and Mitsui & Co Ltd also up 6.7 percent at 2,550 yen.

Financials were mixed, with Japan's largest bank Mitsubishi UFJ Financial Group rising 2.6 percent to 1,160 yen while No.3 Sumitomo Mitsui Financial Group fell 1 percent to 902,000 yen.

Fast Retailing Co Ltd fell 1.7 percent to 9,290 yen, one of the biggest drags on the Nikkei, after the firm said on Friday that monthly sales at its Uniqlo casual-clothing stores in Japan fell 2.8 percent in April, hit by weak customer traffic due to a string of rainy days.

Japanese telecoms and Internet group Softbank Corp, which owns a 3.9 percent stake in Yahoo Inc, fell 0.9 percent to 2,110 yen after Microsoft Corp withdrew a $47.5 billion offer for Yahoo on Saturday.

Yahoo Japan, in which Softbank has a 41 percent stake, fell 3.3 percent to 45,700 yen.

Trade picked up on the Tokyo exchange's first section, with 2.1 billion shares changing hands, compared with last week's daily average of 1.9 billion.

Advancing stocks beat decliners by more than 2 to 1.