A robust start to the U.S. holiday shopping season, providing some reassurance about the health of the U.S. economy, also buoyed camera and office equipment maker Canon Inc <7751.T> and other high-tech exporters and auto makers such as Honda Motor Co Ltd <7267.T>.
TOKYO (Reuters) - Japanese stocks accelerated their advance on Monday to more than 2 percent after a newspaper reported the Chinese government's investment arm is expected to buy Japanese stocks, boosting hopes for new demand for the underperforming market.
A robust start to the U.S. holiday shopping season, providing some reassurance about the health of the U.S. economy, also buoyed camera and office equipment maker Canon Inc <7751.T> and other high-tech exporters and auto makers such as Honda Motor Co Ltd <7267.T>.
Beaten-down financial stocks including industry leader Mitsubishi UFJ Financial Group <8306.T> recovered some ground after a Wall Street rebound by retailers and banks on Friday.
Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd, said the China report sparked short-covering because if the Chinese fund wants to buy Japanese stocks it underscores the fact that they are undervalued.
!ADVERTISEMENT!"The China news is positive for Japanese stocks, even in the mid to long term, as it signifies the emergence of a new Asian investor with huge funds, while European and U.S. investors hold off from active trade here," he said.
Citing unnamed company sources, the Nikkei business daily reported on Monday that China Investment Corp (CIC), Beijing's new $200 billion sovereign wealth fund, had begun trying to recruit strategists specializing in Japanese stocks and other investment products.
"But today's gains are totally within the limits of a rebound. It's still hard for the Nikkei to break above the 15,500 level as it's still unclear where the U.S. subprime problems are going," Akino said.
By 0418 GMT, the benchmark Nikkei average <.N225> was up 2.4 percent or 357.04 points at 15,245.81.
The broader TOPIX index <.TOPX> climbed 2.6 percent or 37.71 points to 1,475.09.
Despite its gains, the Nikkei still underperformed other Asian markets. MSCI's measure of other Asia-Pacific stocks <.MIAPJ0000PUS> was up 3.5 percent.
Last Friday, also known as Black Friday, marked the first official day of the year-end shopping season in the United States, where more than 147 million shoppers flocked to stores over the four-day Thanksgiving holiday. Although average spending fell from last year the number of shoppers rose, a retailers' group said on Sunday.
EXPORTERS UP
Shares exporters shot up. Canon climbed 2.9 percent to 5,600 yen and Sony Corp <6758.T> jumped 4.9 percent to 5,520 yen.
Sony was also boosted by a ratings upgrade by Mizuho Securities to "2" from "3."
In a note published on Thursday, Mizuho said an end to the negative factors afflicting Sony, including large losses on the PlayStation 3 game console, seems to be in sight.
Toyota Motor Corp <7203.T> rose 2.6 percent to 6,020 yen and Honda gained 3.4 percent to 3,690 yen.
Shares of Mitsubishi UFJ Financial Group, Japan's largest bank, surged 7.3 percent to 996 yen, while No.2 Mizuho Financial Group <8411.T> shot up 5.5 percent to 552,000 yen and Sumitomo Mitsui Financial Group <8316.T>, Japan's third-largest bank, gained 6 percent to 862,000 yen.
Another notable stock was Astellas Pharma Inc <4503.T>.
The drug maker rose 4.9 percent to 4,960 yen after saying it would buy back up to 40 billion yen ($368.8 million) worth or up to 8 million of its own shares between December 3 and January 18.
(Reporting by Aiko Hayashi, Editing by Michael Watson)
