Nikkei climbs as Toyota, exporters advance

Tokyo, May 26: The Nikkei average rose 1.55 percent by midmorning on Friday as shares of Toyota Motor Corp. and other exporters rose after a report showed U.S. economic growth was below expectations, relieving some concern about inflation in Japan's key export market.

Shares of Nintendo Co. Ltd. recouped most of their losses from the previous session after a brokerage said it saw no reason to be bearish on the stock, while Nisshin Steel Co. Ltd. rose on a report it will build a plant in India.

A U.S. government report showed first-quarter growth in the world's largest economy was slower than expected. The data did not exacerbate worries about inflation and higher interest rates, helping to send U.S. stocks higher.

''The market has received some short-term comfort,'' said Tatsuyuki Kawasaki, director of equities trading at Kaneyama Securities, referring to the U.S. report.

But the data was unlikely to completely dispel concerns about U.S. inflation and further rate increases, he said.

''On a macro basis, in terms of fundamentals we still don't know about the outlook for the U.S. economy.'' The Nikkei was up 243.48 points at 15,937.23 as of 0015 GMT.

The broader TOPIX index was up 1.64 percent at 1,610.74.

Toyota added 1.5 percent to 6,100 yen.

Chip-equipment maker Advantest Corp. rose 1.4 percent to 11,860 yen.

In Osaka trade, Nintendo advanced 7.7 percent to 18,790 yen, recouping most of its losses from the previous session after brokerage Merrill Lynch kept its ''buy'' rating on the stock and told investors there was no reason to be bearish about the company's profit forecast.

While the videogame maker expects a healthy recovery this year on sales of its upcoming console, its lower-than-expected profit forecast had helped send its shares lower in recent sessions.

Shares of Nisshin Steel Co. Ltd. rose 3.2 percent to 385 yen after business daily Nihon Keizai said the company plans to build a plant in India with Spanish partner Acerinox for 30-40 billion yen (6-355 million).

Investors showed little reaction to data that national core consumer prices rose 0.5 percent in April from a year earlier, in line with expectations.

Reuters