(Updates to midmorning)
TOKYO, Dec 3 (Reuters) - Japan's Nikkei average rose 1.5
percent on Wednesday as investors snapped up bargains such as
Sony Corp and other beaten-down exporters on cautious optimism
that things may start to improve on Wall Street.
But automakers bucked the rising trend, with Honda Motor Co
down 4.4 percent in the face of a drop in U.S. sales and a report
by the Nikkei business daily that it is scaling back its overseas
expansion plans.
U.S. stocks rebounded on optimism after global bellwether
General Electric pledged to leave its dividend intact, while
financial shares gained on a Federal Reserve move to extend
several emergency measures integral to stabilising banks.
Additional encouragement came after U.S. automakers submitted
survival plans and a top lawmaker predicted Washington would
approve a bailout, saying that bankruptcy was not an option.
"Expectations for a bailout for the Big Three automakers
boosted Wall Street, and with Citigroup also basically taken care
of, the safety net appears to have been spread," said Takashi
Ushio, head of the investment strategy division at Marusan
Securities.
"Of course all the worries haven't been completely erased,
but it appears as well that markets have become more resilient in
the face of bad news than they were a few months ago."
Other market players said the fact that the dollar was
hovering around 93 yen would keep gains limited.
The benchmark Nikkei gained 120.84 points to 7,984.53 yen
after falling 6.4 percent on Tuesday, while the broader Topix
rose 1.3 percent to 797.03.
The optimism was underlined by the fact that orders placed
through 12 foreign brokerages prior to the start of trade showed
that foreign brokers were set to buy Japanese shares, albeit by a
slim margin, for only the second time in nearly a month.
But bad news took a toll on several sectors despite the broad
buying.
Honda fell 4.4 percent to 1,804 yen and Toyota Motor Co was
down 1.2 percent at 2,790 yen after U.S. monthly auto sales in
November plunged 37 percent to the lowest level since 1982, data
released on Tuesday showed.
U.S. sales for Toyota dropped 34 percent, Honda fell 32
percent, Ford Motor Co was off 31 percent, Nissan Motor Co
tumbled 42.2 percent and Chrysler LLC sales fell 47 percent.
Steel makers slipped as well after the Nikkei business daily
reported that top Japanese steelmakers are considering
temporarily shutting down blast furnaces as early as this month
in a move to cope with falling demand.
JFE Steel Corp, the core unit of JFE Holdings, is considering
shutting down some of its seven blast furnaces in Kurashiki and
Fukuyama in western Japan, possibly on a rotating basis, the
Nikkei said, while Kobe Steel is deciding whether to shut down
one of its three furnaces in western Japan.
The shutdowns may be for two or three days, the paper said.
JFE Holdings was down 0.5 percent to 2,095 yen and Nippon
Steel Corp, which the Nikkei said may extend the suspension of a
blast furnace in western Japan, fell 1.1 percent to 267 yen.
Canon Inc rose 1.7 percent to 2,685 yen, while Sony edged up
0.8 percent to 1,765 yen.
(Reporting by Elaine Lies; editing by Sophie Hardach)
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