2 Min Read
* Exporters, banks attract buying
* If dollar trades at 100 yen, companies will likely post marginal profits on net basis - Rakuten
By Ayai Tomisawa
TOKYO, Oct 4 (Reuters) - Japan's Nikkei share 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 percent to 16,695.78 in midmorning trade.
Exporters were well supported as the dollar was up 0.3 percent to a 13-day high at 101.925 yen, with Toyota Motor Corp rising 1.6 percent and Honda Motor Co gaining 1.9 percent.
"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 percent and Hitachi Ltd rising 1.8 percent.
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 percent 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 percent and Mizuho Financial Group advancing 2.1 percent.
The broader Topix advanced 0.6 percent to 1,339.00 and the JPX-Nikkei Index 400 rose 0.6 percent to 11,991.10. (Editing by Shri Navaratnam)