Japan's Nikkei average gained 1 percent on Wednesday as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and other exporters rose after the dollar hit a 3-month high against the yen and on hopes for a possible government stock-buying scheme. Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) jumped 7 percent after an official said the automaker plans to produce more of its new Insight hybrid cars from April. Honda has received orders for almost three times its monthly sales target for the gasoline-electric model it launched on February 6 in Japan. Japan's finance minister said on Tuesday the government was looking into expanding share buying to support the stock market and the Nikkei business daily said this might include buying directly from the market. Market players said the news was positive but remained wary. "Of course there's doubts about whether it can be carried out, so it's hard to really be pleased at this point," said Hideyuki Ishiguro, a supervisor in the investment advisory section at Okasan Securities. "But expectations that the government is most likely to buy internationally known blue-chip shares such as Sony, Panasonic and Toyota has helped to give these shares a boost that is lifting the overall market as well." Though the benchmark Nikkei .N225 climbed more than 2 percent in early trade, share prices fell back later as worries about the U.S. economy and whether shares there will rise for a second straight day prompted investors to sell. "There's still a lot of uncertainty about the U.S., a lot of people want to wait and see," said Katsuhiko Kodama, a senior strategist at Toyo Securities. The Nikkei gained 69.58 points to 7,338.14 and appeared likely to snap a three-day losing streak that saw it fall as low as 7,155.16 on Tuesday -- within sight of a 26-year low just under 7,000. The broader Topix .TOPX rose 0.8 percent to 735.76 after posting its lowest close since December 1983 on Tuesday. The yen edged down against the dollar and euro as its perceived safe-haven status crumbles on a rapidly weakening Japanese economy and domestic political woes, falling to a three-month low against the dollar. By midafternoon the dollar was fetching 96.91 yen, up 0.2 percent. Honda climbed 7 percent to 2,370 yen, becoming the biggest contributor to the Nikkei 225 by volume weight. Canon rose becoming the biggest contributor to the Nikkei 225 by volume weight. Canon rose 4.9 percent to 2,470 yen and Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) gained 3.2 percent to 3,190 yen.

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