Nikkei tracking gains on Wall Street

Tue Oct 23, 2007 9:19pm EDT

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TOKYO (Reuters) - Japan's Nikkei average rose 0.5 percent on Wednesday following gains on Wall Street, with Chugai Pharmaceutical Co Ltd (4519.T: Quote, Profile, Research, Stock Buzz) jumping after it reported strong results.

"The market has started to focus on earnings," said Kenichi Hirano, operating officer at Tachibana Securities. "The results announced so far have not been bad, and investor sentiment has been improving gradually."

He said he was waiting for Thursday's earnings for clues for the market's short-term direction. Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) and Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) are among the companies to announce results on Thursday.

"The market will not test the downside if they report solid earnings," he said.

As of 0100 GMT the benchmark Nikkei .N225 was up 92.00 points at 16,542.58. The broader TOPIX index was up 0.8 percent at 1,582.60.

Chugai Pharmaceutical jumped 7.9 percent to 1,945 yen after the firm reported a 24 percent increase in its operating profit for the nine months ended in September.

Takeda Pharmaceutical Co Ltd (4502.T: Quote, Profile, Research, Stock Buzz) rose 1.1 percent to 8,060 yen after the Nikkei business daily reported on Wednesday that the drugmaker is likely to post an operating profit of about 530 billion yen ($4.6 billion) for the year to March, up 16 percent thanks to brisk sales of its diabetes drug in the United States.

Honda, Japan's second-biggest automaker, gained 2.1 percent to 3,860 yen after it said it would start churning out gasoline-electric hybrid cars in large volumes with a hybrid-only family car planned for a 2009 launch.

Banks extended gains. Mitsubishi UFJ Financial Group Inc (8306.T: Quote, Profile, Research, Stock Buzz) rose 1.4 percent to 1,061 yen and Mizuho Financial Group Inc (8411.T: Quote, Profile, Research, Stock Buzz) climbed 1.3 percent to 629,000 yen. Sumitomo Mitsui Financial Group Inc (8316.T: Quote, Profile, Research, Stock Buzz) gained 0.9 percent to 859,000 yen.