TOKYO, February 2 – Japan’s Nikkei average rose 1.6 per cent on Tuesday, with Toyota Motor jumping after detailing plans of its fix for recalled vehicles, while exporters climbed on a weaker yen and strong US manufacturing data. Resource-linked shares such as trading house Mitsubishi gained ground after oil and gold settled up 2 per cent on Monday as commodity markets started February on a steadier note following their worst fall in more than a year last month. Toyota clung to earlier gains and climbed 4.5 per cent, after the automaker’s head of quality acknowledged sales were suffering, though he said he did not know how much it would cost to recall and fix millions of vehicles with faulty accelerators. But analysts said any overall Nikkei rise would be limited ahead of a slew of events including a Senate hearing on the Obama administration’s proposed new limits on big banks later on Tuesday and US jobs data later this week. “With expectations gradually receding as earnings are running their course, investors are starting to look to clues about a recovery in the global economy such as the ISM and jobs data,” said Tomomi Yamashita, a senior fund manager at Shinkin Asset Management. “Another source of concern is moves in emerging countries, and they could limit further gains in the market for now.” India on Friday raised banks’ cash reserve requirements by more than expected, joining a trend in other major emerging economies towards gradual tightening of loose monetary policies. China had already started to tighten policy by raising banks’ reserve requirements, clamping down on loan growth and accepting higher yields at bill auctions. The benchmark Nikkei ended up 166.07 points at 10,371.09. On Monday the Nikkei briefly fell to 10,129.91, around the level of its 75-day average, which market players said should serve as support for now. Analysts said the Nikkei is likely to try resistance at 10,600 over the short term, but could fall back and test support if it fails to break decisively above that point. The broader Topix added 1.6 per cent to 912.82. The Institute for Supply Management’s (ISM) manufacturing index showed US factory activity grew in January at a faster rate than expected, helping send Wall Street higher on Monday. A market focus is the US non-farm payrolls report to be issued on Friday. Analysts believe the economy added 5,000 jobs in January, a Reuters poll showed. Another negative surprise after the previous month’s unexpected surge in job losses could roil markets. Testimony obtained by Reuters showed that Paul Volcker, an economic adviser to US president Barack Obama, will say that limiting commercial banks’ ability to engage in proprietary trading – when firms make bets on markets with their own money – will help reduce risk. “Once some of the details of the banking proposal are out, we may know what direction the proposal will take, whether it will be softer on banks than many worry about or if it will require banks to limit risky assets, and how,” said Noritsugu Hirakawa, a strategist at Okasan Securities. Some 1.9bn shares changed hands on the Tokyo exchange’s first section, steadily slowing after marking the highest volume in seven months above 3bn shares in January. Advancing stocks outnumbered declining ones by more than two to one. The dollar clawed higher against the yen by 0.2 per cent to Y90.75. Investors fret about a stronger yen because it eats into exporter earnings when repatriated. Canon rose 2.7 per cent to Y3,610, Sony climbed 3.1 per cent to Y3,155 and Tokyo Electron gained 2.4 per cent to Y5,600. Toyota jumped to Y3,605. It detailed plans on Monday to fix nearly 4.5 million vehicles equipped with faulty accelerators in North America and Europe. But the jump in its shares comes after about an 18 per cent tumble over the last seven business days, with investors concerned about the long-term impact on earnings. Toyota is set to report results on Thursday. Resource-linked stocks gained. Mitsubishi jumped 5.1 per cent to Y2,249 and Mitsui & Co climbed 5.8 per cent to Y1,368. Oil and gas field developer Inpex gained 2.9 per cent to Y670,000. Mitsui & Co also revised up its net profit forecast for the year to March to Y140bn ($1.5bn), up from a previous outlook of Y120bn. Nomura Holdings, Japan’s largest brokerage, reported its third straight quarterly profit, boosted by fees to manage a rush of public share offerings. Prior to the announcement, its shares ended the day up 3.8 per cent at Y705.

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