CORRECTED - CORRECTED-Nikkei up 1.2 pct, Honda jumps on strong U.S. sales
(Corrects speaker in 4th paragraph, starting "There is talk about inflation ..." to Yoshihiro Ito) (Adds stocks and comments)
TOKYO, June 4 (Reuters) - Japan's Nikkei average rose 1.2 percent on Wednesday, with Honda Motor Co Ltd (7267.T) roaring ahead after it reported double-digit growth in U.S. sales in May, bucking the industry trend.
Automakers and other exporters such as Sony Corp (6758.T) also got a boost from a softer yen JPY= against the dollar.
Fast Retailing Co Ltd (9983.T) shot up after a report that the operator of the Uniqlo casual clothing chain is likely to beat its own profit forecast. [ID:nT286842]
"There is talk about inflation, but for Japan it means the end of deflation -- and that's good for equities," said Yoshihiro Ito, managing director at Okasan Asset Management.
The benchmark Nikkei .N225 ended the morning up 175.23 points at 14,384.40. The broader Topix index gained 1.3 percent to 1,425.82.
Tokyo's gains came despite U.S. stocks falling on Tuesday after a report that Lehman Brothers LEH.N may have to raise more capital, fuelling fears of another round of big losses from the credit crisis.
"The Tokyo market had priced that in already the previous day, and the dollar trading above 105 yen is also reassuring to those buying Japanese stocks," said Toshihiko Matsuno, assistant general manager of investment and research at SMBC Friend Securities.
The report on potential problems at Lehman pushed down Japanese financial shares on Tuesday, but they bounced back on Wednesday, with top lender Mitsubishi UFJ Financial Group (8306.T) climbing 2.1 percent to 1,141 yen. Matsuno and others pointed to a recent trend in which the Tokyo market often moves independently of Wall Street.
"I see a change in investors' minds. There is a growing view that Japanese corporate earnings will not be that bad," said Ito at Okasan Asset Management.
Fast Retailing jumped 10.7 percent to 9,810 yen, by far the biggest contributor to the Nikkei's gains.
The Nikkei business daily reported on Wednesday that the firm was likely to post a better-than-expected 28 percent rise in operating profit this year, beating its own projection thanks to strong sales.
AGRI STOCKS ON RISE
Some agriculture-related stocks rose amid growing concerns over the global food crisis. [ID:nL03499222]
Farm equipment maker Iseki & Co Ltd (6310.T) jumped 15.1 percent to 365 yen and rival Kubota Corp (6326.T) gained 3.3 percent to 907 yen. Continued...
NKorea's Kim has cancer-TV
