TOKYO, Dec. 2 (Xinhua) -- Japan's 225-issue Nikkei Stock Average edged up 0.38 percent on Wednesday as positive consumer spending results in the U.S. spurred exporter optimism and short-covering bolstered the market as the yen retreated further against the dollar.
The key benchmark Nikkei added 36.74 points from Tuesday, elevated in part by resurgent commodity-based issues, to close at 9,608.94, a fresh closing high since Nov 18.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 0.98 points, or 0.11 percent, to 858.74.
Government plans announced on Tuesday to support the economy didn't ignite the market, but insiders are waiting to see exactly how the economic package shapes up in the days to come.
Japan's central bank announced Tuesday that it would offer 10 trillion yen (115 billion U.S. dollars) in new short-term funds, however there is increased focus on the outcome of a meeting between the Bank of Japan's governor Masaaki Shirakawa and Prime Minister Yukio Hatoyama, to be announced later on Wednesday.
"The market wasn't happy after the announcement, but short-covering is preventing further falls -- partly on the weaker yen, and partly on gains by Chinese shares. Plus hopes that something may emerge from the meeting today between Shirakawa and Prime Minister Hatoyama are making it hard to sell," said Noritsugu Hirakawa, a strategist at Okasan Securities.
However unconfirmed reports that the government may spend up to4 trillion yen (46 billion U.S. dollars) in an extra budget for the current fiscal year in an economic package, the details of which may be released as early as Thursday, has market players poised in an anticipatory state.
Deputy Prime Minister Naoto Kan has said the spending will focus on support for eco-friendly industries, the economy and employment.
Finance Minister Hirohisa Fujii indicated this week that the extra spending for the year ending March 31 would exceed 2.7 trillion yen.
Banking issues ended mixed on Wednesday after Tuesday's surge, as investors were irresolute following the news from the Bank of Japan after the close of trade the previous day. Coupled with this concern is still rife about banks' needing to issue more common shares to raise capital, according to brokers.
"Investors don't know whether to believe in what's being done about the Japanese economy, and this is leading to profit-taking at the highs," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.
Top bank Mitsubishi UFJ Financial Group Inc. lost on gains made Tuesday, retreating 2.21 percent to 486 yen. Sumitomo Mitsui Financial Group Inc. also closed down, losing 2.24 percent to 2,830 yen. Mizuho Financial Group inc., however, ended trade in positive territory, creeping up 0.60 percent to 166 yen.
The dollar gained 0.4 percent on the yen and stood at 87-yen on Wednesday and although there was some consternation about the rise, causing investors to fret about profits eroding when repatriated, gains were still made by export-related issues.
Amongst the automakers, Nissan Motor Co. Ltd. added 2.48 percent at 661 yen, after an industry report said the company's U.S. sales jumped 21 percent last month. Hino Motors Ltd. surged 5.49 percent to 288 yen and Honda Motor Co. Ltd. rose 2.14 percent 2,865 yen. Isuzu Motors Ltd. gained 3.75 percent to 166 yen and Toyota Motor Corp. ended up 1.13 percent to 3,560 at the 3pm bell.
Tech-shares were buoyed by positive consumer spending data from the U.S. following 'Cyber Monday' -- the Monday following the Thanksgiving holiday and the busiest shopping day on the retail calendar, both on the high street and online, particularly for electronic goods.
Kyocera Corp. gained 1.14 percent to 7,080 yen and Sharp Corp. crept up 0.19 percent to 1,029. Toshiba Corp. added 1.27 percent to 479 yen and Panasonic Corp. advanced 1.85 percent to close at 1,156 yen.
As gold hit record levels in New York at an all-time high of 1,216.90 U.S. dollars and spot gold climbed 1.6 percent to 1,215.85 U.S. dollars, commodity-based issues in Japan parried gains.
Bullion has risen 38 percent this year as the dollar has dropped 8.5 percent against a basket of six major currencies.
Crude oil also settled at its highest price in two weeks and copper surged to a 15-month high as positive manufacturing data in the United States and China bolstered the economic outlook.
Sumitomo Metal Mining Co. Ltd rose 1.00 percent to 1,457 yen and Nippon Oil Corp. gained 0.27 percent to 374 yen. Dowa Holdings Co. Ltd., a firm involved in the mining of minerals, gained 2.3 percent to 490 yen and pacific Metals Co. Ltd. moved into positive territory on Wednesday, gaining 1.19 percent to close at 1,197 yen.
Trade was active on the Tokyo exchange's First section, with some 2.2 billion shares changing hands, compared with last week's daily average of around 2 billion.
Declining stocks outnumbered advancing ones by 849 to 713.
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