Nikkei opens higher, then slips back


Shares in Honda and other Japanese carmakers rose Tuesday on export hopes boosted by a weaker yen

TOKYO, Japan -- Tokyo stocks opened higher Tuesday, with export-oriented carmakers making gains on the weaker yen and the strong performance of U.S. markets.

Also helping the market was a report in the Nihon Keizai business daily that Prime Minister Junichiro Koizumi had decided to draw up a second fiscal 2001 extra budget, likely to total more than two trillion yen ($16.24 billion).

But there was considerable volatility in the market, with weakness among many tech stocks sending the benchmark Nikkei 225 average up and down in morning trade

The Nikkei was up 0.08 percent or 8 points at 10,736 while the broader capital-weighted TOPIX index was up 0.4 percent or 4.33 points to 1,069.33.

Among automakers, Toyota was again up sharply, putting on 140 yen or 4.6 percent to 3370 yen on a weaker yen. No. 2 carmaker Nissan added 27 yen or 4.5 percent to 620 yen, while third-ranked Honda was up 1.9 percent or 90 yen to 4890 yen.

Sony, chipmakers down

Consumer electronics leader Sony was down 70 yen or 1.2 percent to 5760 yen, while computer and chipmakers Toshiba, Fujitsu and Hitachi were all slightly weaker. Hitachi had the heaviest fall, down 1.25 percent to 948 yen.

Leading mobile telco NTT DoCoMo eased 2.3 percent to 1.71 million yen, while smaller rival KDDI was down 1.1 percent to 334,000 yen. Japan Telecom rose 3000 yen to 399,000 yen.

Among the big banks, Mizuho Holdings made some ground, up 1.8 percent to 344,000. Rivals UFJ, MTFG and Sumitomo Mitsui were also higher, but second-tier Asahi Bank continued to waver.

"We've got a firmer New York market and a weak yen to support exporters," Katsuhiko Kodama, head of equities at Toyo Securities, told Reuters news agency.

Urban renewal likely to benefit in extra budget

Some issues seen to benefit from urban development gained ground in early trade, including Mitsui Fudosan and Sumitomo Realty & Development. Urban renewal is expected to be a priority area in any second extra budget.

Other markets in the region also were higher, with Australia and New Zealand up strongly and Korea's Kospi putting on 3.73 points or 0.6 percent to 630.16.

Australia's S&P/ASX200 added 26.5 points or 0.8 percent to 3358.4, with resources giant Rio Tinto one of the best blue chip performers, up 2.8 percent to A$36.00.

Market heavyweight News Corp was up 1.7 percent to A$15.09. Banks also strengthened.

In New Zealand, the Top 40 index added 23.27 points or 1.1 percent to 2041.98.

In Seoul, big gainers included Hyundai Motor (up 2.3 percent to 26,400 won), Hynix Semiconductor (up 3.6 percent to 2000 won) and market heavyweight Samsung Electronics, up 1.37 percent or 3000 won to 221,500 won.

The gains in Asia followed a strong close Monday in the U.S., with the Dow Jones industrial average up 109.47 points or 1.1 percent to 9976.46 and the Nasdaq composite up 35.84 points or 1.89 percent to 1934.42.

Reuters contributed to this report.