Japan's Nikkei share average rose more than 1 percent on Thursday, led by automakers which reported strong June sales in the U.S. market, and broadly supported by a weaker yen.
Japan’s Nikkei share average rose more than 1 percent on Thursday, led by automakers which reported strong June sales in the U.S. market, and broadly supported by a weaker yen.
The Nikkei share average gained 1.2 percent to 20,568.65 by mid-morning.
The market has been pressure by Greece’s festering debt crisis, but investors are buying back shares on the dips, traders said.
“It’s merely a rebound and not aggressive buying,” said Masashi Oda, senior investment officer at Sumitomo Mitsui Trust Bank, adding that buying force was not strong enough to push the Nikkei above a 18-1/2-year high of 20,952.71 hit last month.
Many investors were also awaiting Thursday’s scheduled release of the closely watched U.S. non-farm payroll report for June, he noted.
“If the U.S. economic data is strong, the next thing investors will see is whether the Federal Reserve will hint a rate hike amid Greek woes in Europe,” he said. “If the Fed takes a cautious stance on how the global market will perceive that, its move on a rate decision is in focus now.”
Automakers were strong, with Nissan Motor Co rising as high as 3.6 percent after its June U.S. sales rose 13 percent on the year helped by a 54 percent increase in its popular small SUV Rogue.
Meanwhile, the dollar traded at 123.22 yen, pulling further away from a five-week low of 121.93.
Construction stocks attracted buying on hopes for stronger domestic demand. Kajima Corp jumped 3.2 percent, Shimizu Corp soared 2.8 percent while Taisei Corp surged 2.7 percent. Goldman Sachs analysts say that consumption is expected to improve in the second half of the year.
The brokerage favours reflation-related sectors such as financials and real estate, which had long underperformed but have been rebounding since spring, it said.
The broader Topix gained 0.9 percent to 1,650.95 and the JPX-Nikkei Index 400 rose 0.9 percent to 14,900.29.