Nikkei rises on exporters ahead of long holiday
TOKYO, May 2 (Reuters) The Nikkei average rose 1.14 percent by midafternoon on Tuesday as a halt in the yen's rise eased worries over its impact on exporters' earnings, luring investors to such shares as Honda Motor Co. Ltd. ahead of a series of holidays.
The Tokyo stock market will be closed from Wednesday to Friday for Japan's Golden Week holidays, and resume trading on Monday.
Canon Inc. hit a lifetime high after a brokerage lifted its earnings forecasts for the firm and said currency fluctuations would have a limited impact on its earnings, while Bridgestone Corp. surged after raising its profit estimates.
''The dollar/yen rate is inspiring buying (of blue-chip exporters),'' said Yutaka Shiraki, a senior strategist at Mitsubishi UFJ Securities. ''Also, there are so many investors who find the shares cheap to buy,'' he said.
The Nikkei was up 193.08 points at 17,118.79 as of 0450 GMT.
The TOPIX was up 1.16 percent at 1,737.08.
The dollar traded at around 113.75 yen bouncing back from a seven-month low below 113 yen, following a report that U.S.
Federal Reserve Chairman Ben Bernanke said markets had misread his congressional testimony last week.
The report increased speculation the U.S. has not finished raising interest rates. Bernanke's comments last Thursday had fanned views that the U.S. central bank would wrap up its campaign of tightening policy after an expected bump up in rates to 5 percent at the Fed's May 10 monetary policy meeting.
A stronger yen is a minus for exporters as it eats into profits when earnings from abroad are brought home.
Honda gained 4.1 percent to 8,450 yen. Shares in Japan's third-biggest auto maker have advanced more than 8 percent since last week, when the firm reported it had more than doubled its quarterly profit and announced a stock split.
Canon rose 2.7 percent to 8,880 yen, off a lifetime high of 9,020 yen, after brokerage Goldman Sachs on Monday raised its midterm earnings forecasts for the maker of cameras and copiers, citing stronger sales growth in key areas.
Canon estimates the yen's rate against the dollar will average 117 yen in the nine months to December.
Shares of Bridgestone gained 4.4 percent to 2,875 yen after Japan's top tyre maker raised its operating profit forecast for the six months to the end of June, citing a weaker yen.
Toray Industries Inc., the world's biggest supplier of carbon fibre, climbed 4.9 percent to 1,103 yen on lingering hopes for increased carbon fibre product demand from aircraft makers. The stock earlier hit a lifetime high of 1,110 yen.
REUTERS CS HT1045