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Japan stocks end higher as auto sector outlook brightens

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Stanley White
·2 min read
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By Stanley White

TOKYO, Feb 10 (Reuters) - Japanese stocks ended higher inchoppy trading on Wednesday after positive earnings from marketbellwethers Toyota and Honda highlighted the improving outlookfor the global economy.

The Nikkei index ended up 0.19% at 29,562.93, withconsumer cyclical and technology shares leading gains. Thebroader Topix rose 0.27% to 1,930.82.

This year, the Nikkei has rallied more than 7% to itshighest level since 1990 as investors bought shares of Japaneseexporters which are expected to benefit as the global economyrecovers from the COVID-19 pandemic.

Stocks have risen so quickly that some traders warn that acorrection is overdue, but most analysts say the Nikkei is stillon track to reclaim the psychological important 30,000 markbecause the earnings season so far been better than expected.

"A lot of investors are buying on dips, which shows that themood is positive," said Masahiro Yamaguchi, head of investmentresearch at SMBC Trust Bank.

"The global economic recovery will become more concrete asthe year progresses, which benefits Japanese companies that aresensitive to global growth."

Toyota Motor Co ended up 1.7% after brieflytouching its highest level in more than five years as thecompany reported a bigger-than-expected increase in earnings andraised its forecasts.

Another prominent gainer was Honda Motor Co Ltd,which rose 5.14%, after the automaker upgraded its earningsforecasts.

The biggest decliner on the Nikkei was Japan Tobacco Inc, which tumbled by 7.46%, after cutting its dividend andannouncing restructuring.

So far this earnings season, 80% of Japanese companies havebeaten forecasts for the December quarter, according toRefinitiv data.

There were 116 advancers on the Nikkei index against 102decliners.

The volume of shares traded on the Tokyo Stock Exchange'smain board was 1.16 billion, compared to the average of1.23 billion in the past 30 days.

(Reporting by Stanley White; Editing by Amy Caren Daniel)