RTRS: Nikkei climbs 4.9% on govt rescue plan, yen retreat
Japan's Nikkei stock average climbed 4.9 percent on Tuesday, its biggest one-day gain in six weeks, as the yen retreated and after the government said it would offer funds to firms whose capital has been hurt by the financial crisis. Exporters gained on a wave of short-covering and Honda Motor Co (7267.T) surged over 9 percent following the announcement of further production cuts in North America and Japan, while a newspaper said the automaker would increase production capacity in China by 23 percent. [ID:nT71705]
After the bell, Nomura Holdings Inc (8604.T), Japan's largest brokerage, posted its fourth straight quarterly net loss and said it may cut staff if needed as it reviews operations.
Japan's trade ministry said capital would be provided only while companies face difficulty in fund-raising due to market turmoil, and firms receiving the funds would be required to draw up plans to boost profitability within three years. [ID:nT115225]
Market players agreed the news was good for the market, but many were sceptical about how far it alone can boost shares, noting that investors are likely to remain wary ahead of a wave of Japanese earnings later this week.
Key firms such as Sony Corp (6758.T), which has warned of massive losses, are due to announce results this week.
"This news will be positive, since it's directed at firms in general and raises hopes that this will help with fund-raising, but the yen's fall has helped too," said Yutaka Miura, senior technical analyst at Shinko Securities.
"We'll have good news and bad news, just one mountain after another, before the downside really solidifies."
The benchmark Nikkei .N225 gained 378.93 points to 8,061.07, its biggest one-day gain since Dec 15. On Monday, it hit its lowest close since Oct 28 -- the day it fell to 6,994.90, a 26-year intraday low.
The broader Topix gained 4.8 percent to 805.49. "The funds injection seems like good news, but at this point there's nothing concrete to grasp," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"With earnings, we get a clear idea of what's good and what's bad. The funds announcement wasn't concrete -- it wasn't like announcing GDP or anything."
