Japan stocks rebound as exporters, Pioneer gain

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By Aiko Hayashi

TOKYO, March 4 (Reuters) - Japan's Nikkei average rose 0.7 percent on Tuesday, rebounding from a six-week low in see-saw trade as investors snapped up exporters such as Honda Motor Co (7267.T) on a halt in the yen's rise and Pioneer Corp (6773.T) jumped on news of restructuring.

But worries over the course of corporate earnings helped put a lid on gains, with Sekisui House Ltd (1928.T) tumbling nearly 5 percent after Japan's top home builder forecast a further fall in profit this year on sluggish demand and rising costs.

Falls in Sumitomo Mitsui Financial Group (8316.T) and other banks showed that investors were still worried over the risk of further fallout from the global credit crisis.

"The recent market woes started from the U.S. subprime loan problems and the fact is that there's no easy way out in sight," said Tsuyoshi Segawa, an equity strategist at Shinko Securities.

The benchmark Nikkei average .N225 ended the morning session up 94.48 points at 13,086.66 after falling as much as 0.8 percent to a six-week low of 12,883.07. The broader TOPIX index also rebounded to close the morning up 0.3 percent at 1,275.45.

Investors picked up shares of battered exporters after the dollar cut some losses against the yen to trade around 103.47 yen JPY=. Rising risk aversion following a drop in global stocks had pushed the dollar to a three-year low of 102.6 yen on Monday.

Shares of Honda rose 2.3 percent to 3,140 yen, recovering from a six-week low in the previous session. Electronics parts maker Kyocera Corp (6971.T) added 1.2 percent to 8,580 yen and industrial robot maker Fanuc Ltd (6954.T) climbed 2.5 percent to 9,290 yen.

Investors are cautious about a stronger yen as that weighs on exporters' profits when their overseas sales are translated back into the Japanese currency.

Fujio Ando, a senior managing director at Chibagin Asset Management, said the combination of U.S. recession fears and the stronger yen trend are haunting investors, leading them to ignore sectors such as electric power, gas and food, which are generally favoured when the yen strengthens.

"Still, there's no way companies will book a huge fall in profits even if the yen goes below 100 yen against the dollar," he said.

Pioneer surged 12.9 percent to 1,178 yen after an industry source said the company is finalising plans to stop all production of plasma display panels. [ID:nT227725]

Among financial issues, Sumitomo Mitsui was down 2.3 percent at 722,000 yen and Mizuho Financial Group (8411.T) fell 0.9 percent to 420,000 yen.

Sekisui House slid 4.7 percent to 982 yen after forecasting that its net profit would fall 7 percent to 56 billion yen as the industry struggles to recover from stricter regulations that have hit housing starts and faces soaring costs for materials. [ID:nT83110]

Trade was moderate on the Tokyo exchange's first section, with 958 million shares changing hands, almost in line with last week's morning average. Declining stocks slightly outnumbered advancers by 812 to 771. (Reporting by Aiko Hayashi)