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Japan's Nikkei shares average rose on Tuesday morning after the yen weakened against the dollar on data suggesting the U.S. manufacturing sector grew more than expected in September.
The Nikkei gained 0.6 per cent to 16,695.78 in midmorning trade.
Exporters were well supported as the dollar was up 0.3 per cent to a 13-day high at 101.925 yen, with Toyota Motor Corp rising 1.6 per cent and Honda Motor Co gaining 1.9 per cent.
“The upbeat U.S. data is lifting expectations for the strong dollar trend, which helps earnings concerns recede for Japanese exporters,” said Hikaru Sato, senior technical analyst at Daiwa Securities.
The Institute for Supply Management (ISM) said on Monday its index of national factory activity rose to 51.5 from 49.4 the prior month, beating analyst expectations in a Reuters poll. Levels above 50 indicate the sector is expanding.
Other exporters also attracted buying, with Panasonic Corp gaining 1.6 per cent and Hitachi Ltd rising 1.8 per cent.
According to analysts at Rakuten Securities, if the dollar trades at 100 yen, 1,377 companies listed on the main board would report a drop of less than 10 per cent in their pretax profits this fiscal year. But the companies' net profit will likely rise marginally, they added.
Banks outperformed, with Mitsubishi UFJ Financial Group adding 1.4 per cent and Mizuho Financial Group advancing 2.1 per cent.
The broader Topix advanced 0.6 per cent to 1,339.00 and the JPX-Nikkei Index 400 rose 0.6 per cent to 11,991.10.
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