Nikkei gains 0.5 pct after Wall Street rises

TOKYO, July 19: The Nikkei average rose 0.53 percent on Wednesday as exporters such as Komatsu Ltd. gained after a drop in crude oil prices helped U.S. stocks and restored some investor confidence in the U.S. economy, a key market for Japanese products.

Buying also propped up bank shares, such as Mitsubishi UFJ Financial Group Inc., on hopes of earnings growth after the Bank of Japan raised interest rates for the first time in six years last week.

''Investors prefer companies with better earnings than technology companies, like banks,'' said Takahiko Murai, general manager of equities at Nozomi Securities.

''There are concerns over the prospects for the technology sector's earnings in the U.S., and I think such concerns should affect the market here as well,'' he said.

The Nikkei was up 77.18 points at 14,514.42 as of 0051 GMT after losing more 7 percent over the previous five sessions. The TOPIX index was up 0.3 percent at 1,479.75.

Precision equipment maker Hoya Corp. is among a few companies to report quarterly earnings later in the day. Shares of Hoya were up 1.1 percent at 3,590 yen.

Komatsu, the world's second-biggest maker of construction machinery, was up 2.2 percent at 2,040 yen.

Mitsubishi UFJ, Japan's biggest banking group, rose 0.7 percent to 1.53 million yen and No. 2 Mizuho Financial Group Inc. gained 0.5 percent to 937,000 yen.

A widening spread between lending rates and deposit rates is expected to prop up the sector's earnings.

Shares of Chugai Pharmaceutical Co. Ltd. gained 2.6 percent to 2,345 yen. The drug maker on Tuesday posted a 32 percent drop in preliminary first-half profit -- but still came out well ahead of its own forecast.

Consumer credit company Credit Saison Co. Ltd. rose 4.1 percent to 4,880 yen after Merrill Lynch raised its rating on the stock to ''buy''.

Reuters