Japan's Nikkei up 1.3 pct as financial worries ease

Enlarge Photo A stock quotation board is reflected on a pedestrian's spectacles in Tokyo in this January...

Wed, Jul 9 06:49 AM

TOKYO (Reuters) - The Nikkei stock average rose 1.3 percent on Wednesday, rebounding from a three-month closing low the previous day, as financial shares such as Mitsubishi UFJ Financial Group climbed after comments from the U.S. Federal Reserve helped eased credit worries.

Komatsu Ltd and other machinery stocks powered higher after Japan's May core machinery orders largely beat economists' consensus.

"A sense of relief has spread after Bernanke said he would continue to supply funds, though that's not really surprising," said Masaru Hamasaki, senior strategist at Toyota Asset Management.

"Still, it's hard for the market to gain further as the health of real economies is not good. The trading pattern of a sell-off and a rebound will probably continue for a while."

As of 0042 GMT, the benchmark Nikkei had added 162.50 points to 13,195.60, after sliding 2.5 percent on Tuesday to book its lowest close since April 15.

The broader Topix advanced 1.4 percent to 1,300.94.

Fed Chairman Ben Bernanke said in a speech the U.S. central bank may extend emergency lending facilities for big Wall Street banks past the year-end, showing the Fed is determined to stop the housing-inspired credit crisis from wreaking further havoc on the economy.

Mitsubishi UFJ Financial Group, Japan's biggest bank, climbed 2.9 percent to 961 yen and No.2 Mizuho Financial Group jumped 4.3 percent to 514,000 yen.

Shares of Komatsu, the world's No.2 maker of earth-moving equipment, rose 2 percent to 2,810 yen and industrial robot maker Fanuc Ltd gained 2.5 percent to 9,710 yen.

Japan's core machinery orders rose a faster-than-expected 10.4 percent in May, easing worries that Japanese firms will be cutting back on capital spending to deal with rising energy and raw material costs.

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