Nikkei up 1.8% Sluffing off GM Bankruptcy News

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March 30, 2009 9:06pm ETF BASIC NEWS

nikkei* Nikkei gains 1.8 pct after falling 4.5 pct on Monday
* Yen’s fall vs dollar helps exporter shares

By Rika Otsuka

TOKYO, March 31 (Reuters) – Japan’s Nikkei average rose 1.8 percent on Tuesday as investors picked up exporters like Honda Motor Co (7267.T) that had slid the previous day on fears of bankruptcy for U.S. automakers.

Mizuho Financial Group (8411.T) fell after saying it would not redeem $1.5 billion of perpetual subordinated bonds issued to retail investors when they first become callable next month given current market conditions. [ID:nT127312]

U.S. stocks tumbled on Monday as General Motors Corp (GM.N) and Chrysler LLC took a step closer to potential bankruptcy, and a spate of European bank rescues heightened concerns over the financial system’s health, putting the brakes on a recent run-up. [.N]

“The Japanese stock market opened weaker, dragged down by U.S. stocks, but it soon regained ground as investors thought the previous day’s fall provided a chance to buy,” said Yutaka Miura, senior technical analyst at Shinko Securities.

“The issue of GM and Chrysler is unlikely to spark heavy stock selling again, though it may cap gains in shares,” he said.

The benchmark Nikkei .N225 climbed 146.58 points to 8,382.66, while the broader Topix rose 1 percent to 797.10.

A panel of Japan’s ruling Liberal Democratic Party said on Tuesday it would come up with a system to allow a government agency to buy shares from the market, though the market showed muted reaction as investors awaited details of the plan.

Mizuho Financial Group, Japan’s second-biggest bank, fell 1 percent to 195 yen after it said it would not redeem the perpetual subordinated bonds.

But shares of Mitsubishi UFJ Financial Group (8306.T), Japan’s top lender, rose 1 percent to 493 yen, while No. 3 Sumitomo Mitsui Financial Group (8316.T) added 2.6 percent to 3,610 yen as investors bought back stocks battered in Monday’s sell-off.

Sony Corp (6758.T) and other exporters rose as the yen weakened against the dollar, which was climbing towards 98 yen <JPY=>.

Sony rose 1.7 percent to 2,095 yen, Honda Motor Co (7267.T) rose 2.2 percent to 2,350 yen and Canon Inc (7751.T) edged up 0.5 percent to 2,915 yen. (Reporting by Rika Otsuka; Editing by Chris Gallagher)


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