Asia: Tokyo stages modest recovery



LONDON (ShareCast) - Shares in Tokyo settled in positive territory, following the previous session's decline, as banking shares and exporters powered ahead on hopes of good earning reports.

The benchmark Nikkei 225 index closed up 42 points at 10,866 in Tokyo. On Monday the Nikkei 225 index briefly jumped past the 11,000 mark, for the first time in nearly three years, but later settled in the red.

The broader Topix advanced 0.8% to 920 while the Hang Seng index closed down 16 points at 23,655.

Analysts said market sentiment in Japan was boosted by much stronger than expected US durable goods data and hopes of decent earnings as the earnings season kicks off.

The Commerce Department said December US durable goods orders rose 4.6% from the month before, way ahead of forecasts of a 2% rise. Otherwise traders mostly overlooked uninspiring US housing data. The National Association of Realtors' said its pending homes sales index fell 4.3% last month.

In Japan shares of Mitsubishi UFJ Financial (Other OTC: MBFJF - news) rallied 3.8%, Sumitomo Mitsui Financial (NYSE: SMFG - news) climbed 4.4% while Mizuho Financial (NYSE: MFG - news) rose 2.9%.

Industrial robot maker Fanuc recovered 2.8% after Monday's 7% slump. Car makers Toyota and Nissan also motored ahead after reporting robust sales for 2012 while Canon (Other OTC: CAJFF - news) bucked the upward trend to fall 1.2%.

Mobile phone operator KDDI (Other OTC: KDDIF - news) rose 2.8% after it increased its full-year forecasts on the back of rising contracts for smart phones.

Steel giant JFE Holdings (Other OTC: JFEEF - news) was another strong gainer, up 2.8%, as investors continued to cheer last week's robust China PMI data.

In Hong Kong, shares of lending giant ICBC dragged 2.2% after Goldman Sachs (NYSE: GS-PB - news) sold $1bn worth of its shares, as it reduces its holding in the Chinese bank.