Japan's Nikkei stock average rose 1.5 percent on Wednesday, buoyed by Honda Motor Co (7267.T) and other carmakers as bargain hunters emerged on the view that a decision about the fate of U.S. automakers could come soon. General Motors Corp (GM.N) warned on Tuesday that there was a rising chance it could file for bankruptcy by June, and Bloomberg reported that U.S. President Barack Obama had determined that a bankruptcy for GM was the best option. But a senior U.S. administration official said the report was not accurate. "It seems as though market players bought back auto shares after the comments from a U.S. official indicated the U.S. administration is still trying to save GM," said Toshihiko Matsuno, assistant general manager of investment research at SMBC Friend Securities. Others said the sense that something was likely to be decided on struggling U.S. automakers soon appeared to be providing support. One plan under discussion for GM would be to form a new company of the automaker's best assets, while its laggard brands and money-losing assets would remain under bankruptcy protection, a person familiar with the strategy told Reuters. "If things are decided for U.S. automakers relatively quickly, this will remove one bad factor for the market," said Yutaka Miura, senior technical analyst at Shinko Securities. The benchmark Nikkei .N225 gained 125.18 points to 8,234.71, but was off earlier highs. It had ended the morning session up 3 percent. The broader Topix rose 1.6 percent to 785.69. EXPORTERS GAIN ON YEN Elpida Memory (6665.T) soared 14.7 percent to 780 yen after Taiwan Memory Co, a new computer memory chip company supported by the Taiwan government, said Elpida had been confirmed as its memory partner. Honda climbed 6.1 percent to 2,455 yen while Toyota Motor Corp (7203.T) rose 4.8 percent to 3,260 yen. Nissan Motor Co (7201.T) rose 6.3 percent to 372 yen. Though the dollar was down 0.4 percent against the yen for the day, recent rises -- including a morning bounce after the Bank of Japan's tankan report of quarterly business sentiment -- have provided support for exporters. Japanese business confidence tumbled at its fastest pace on record to an all-time low, the Bank of Japan's tankan corporate survey showed, illustrating the plight of an economy in its worst recession since World War Two. The dollar swung in a wide range of over 1 yen, causing the Nikkei to see-saw in early trade. Sony Corp (6758.T) climbed 4.6 percent to 2,090 yen and Canon Inc (7751.T) rose 2.3 percent to 2,885 yen. Hitachi Ltd (6501.T) gained 1.1 percent to 269 yen.

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