Nikkei rebounds from weak opening


Toyota shares continued to make strong gains in Tokyo Wednesday

Tokyo stocks shrugged off a weak start to strengthen by midday Wednesday after bank issues made good gains.

That rebound came as hopes rose that Japan's major lenders would follow the clean-up of Asahi Bank, which on Tuesday said it would step up efforts to clean up bad loans.

The Nikkei was up 145.74 points or 1.38 percent to 10,721.36 by midday, after sinking as low as 10,490 in morning trade.

The broader capital-weighted TOPIX index was up 0.75 percent or 7.9 points to 1,063.48.

The Nikkei's early weakness came after a soft performance by U.S. markets. Technology stocks were mixed, with Sony back in the black after falling at the opening.

Also weighing on the market is the expectation that Prime Minister Junichiro Koizumi will go ahead with a second extra budget of 2 to 3 trillion yen ($16-24 billion), with an emphasis on urban renewal.

Toshiba recovers from early fall

Leading chipmaker Toshiba, which had risen 17.5 percent during the four sessions through Monday, fell more than 3 percent before recovering to be just 3 yen weaker at 531 yen Wednesday.

Chip and computer maker Fujitsu Ltd also opened well down, but eased just into the black, up 1 yen to 1001 yen.

Hitachi was down 1.4 percent to 917 yen, while consumer electronics giant Sony was up 110 yen or about 1.77 percent to 5750 yen after dipping as low as 5510 in morning trade.

Among banks, Asahi Bank rose 9.57 percent to 103 yen on hopes the lender was through the worst after its announcement on Tuesday that it would become the country's first top bank to post losses for the full year.

Bad loan disposal 'key task'

"Bad-loan disposal is the single most important task for banks at the moment," Masafumi Nakayama, strategist at Mito Securities, told Reuters news agency. "Apparently, the market is sending a cheer to Asahi's efforts."

Banking giant Mizuho Holdings powered ahead, adding 6.7 percent to 351,000 yen, while rival UFJ Holdings was up 3.4 percent to 465,000 yen. MTFG and Sumitomo Mitsui were also higher.

Among automakers, leader Toyota was again up, putting on 100 yen or 3.3 percent to 3360 yen, while No. 2 carmaker Nissan lost 12 yen or 1.9 percent to 603 yen and third-ranked Honda eased 1.8 percent or 90 yen to 4750 yen.

Leading mobile telco NTT DoCoMo was down 1.2 percent to 1.66 million yen, after touching 1.59 million yen in morning trade.Smaller rival KDDI was up 1.8 percent to 326,000 yen. Japan Telecom lost 3000 yen to 396,000 yen.

Restaurant chain operators and meat suppliers were hit by renewed fears of mad cow disease.

The Health Ministry said on Wednesday that a second suspected case of mad cow was found on a farm in the northern island of Hokkaido.

Yoshinoya D & C, a Japanese beef bowl fast-food chain operator fell 3.17 percent to 183,000 yen and Nippon Meat Packers, Japan's largest meat supplier, slipped 1.02 percent to 1,160 yen.

Other markets mixed

Other markets in the region were mixed, with Australia and New Zealand weaker but Korea and Taiwan higher. Other markets in the region were mixed, with Australia and New Zealand weaker but Korea and Taiwan higher.

Hong Kong's Hang Seng index was slightly lower, down 15 points to 11,209 just before midday.

In Seoul, Korea's Kospi was up 3.07 points or 0.5 percent to 619.40.

Australia's S&P/ASX200 was down 13.1 points to 3339.9, as the market digested a demerger proposal by resources stock WMC. It has been in discussions with Alcoa about a possible takeover bid.

In New Zealand, the Top 40 index lost 18.43 points or 0.9 percent to 2024.06. The moves in Asia followed a weaker close Tuesday in the U.S., with the Dow Jones industrial average down 75.08 points or 0.75 percent to 9901.38 and the Nasdaq composite off 53.91 points or 2.79 percent to 1880.51.