Japan's Nikkei stock average rose 1.9 per cent today, climbing for a third day as exporters such as Canon got a boost after solid earnings from IBM and other US companies eased worries about corporate profits amid an economic slowdown.
Japan's second-largest lender Mizuho Financial Group and other financials gained after results from JPMorgan Chase & Co and Wells Fargo & Co heartened investors who had counted on the big banks to fare better than rivals in coping with the turmoil in the housing and credit markets.
"The worst is over. Some worries remain, but U.S. markets are unlikely to see a big fall," said Norio Shimura, deputy head of the equity department at Chuo Securities.
The benchmark Nikkei average ended up 252.17 points at 13,398.30, having gained 3.7 per cent over the past three days.
The broader TOPIX index climbed 1.7 per cent to 1,293.32.
Digital camera maker Canon rose 5.1 per cent to 4,950 yen. Electronics parts maker Kyocera Corp gained 5.5 percent to 8,840 yen, the biggest contributor to the Nikkei.
International Business Machines Corp posted stronger-than-expected quarterly results on Wednesday and raised its 2008 outlook, boosting its shares 2.7 per cent and sending an encouraging signal about technology earnings in the face of a weak US economy.
Still, participants said the market's recent gain has been mostly driven by those picking up recently battered shares, and the upward move is likely to be stifled ahead of the Japanese earnings season that kicks off later this month.
"It's still within a technical rebound at a bottom range. Japanese shares have been sold intensively, so a rebound is natural," said Masaru Hamasaki, senior strategist at Toyota Asset Management.
"Investors know corporate profit will not be good this year, so they want to know what'll happen after that. Sentiment will take a sharp turn for the better when they start seeing some positive signs ahead."