TOKYO, Feb 3 (Reuters) - Japanese shares ended higher on Wednesday, with transport stocks leading gains, as Wall Street’s tech-driven rally overnight and strong domestic earnings forecasts boosted market sentiment.
The Nikkei share average rose 1% to 28,646.50, while the broader Topix jumped 1.3% to 1,871.09.
“Robust earnings of global IT firms have boosted investor expectations for better earnings of Japanese companies, while worries about a short-squeeze triggered by U.S. retail investors had been erased,” said Koichi Kurose, chief strategist at Resona Asset Management.
U.S. stocks finished sharply higher for a second straight day overnight, helped by gains in Amazon.com and Google-parent Alphabet ahead of their results, and by optimism over progress on a U.S. pandemic relief package.
All but one of the 33 sector sub-indexes on the Tokyo exchange traded higher, with pandemic-hit airlines and land transport stocks leading gains.
Japan Airlines jumped 6.56% while ANA Holdings rose 2.9%.
Central Japan Railway, the operator of the bullet trains connecting Tokyo and Osaka, gained 5.47%. West Japan Railway rose 6.86% and East Japan Railway jumped 5.48%.
Transport shares were buoyed by hopes that a drop in the number of daily COVID-19 infections would boost travel, Kurose said.
Japan on Tuesday extended the state of emergency in Tokyo and other regions for another month, seeking to keep the upper hand over a COVID-19 outbreak, although daily case numbers have begun to edge down.
Mitsubishi Motor, up 11.34%, led gains on the Nikkei 225 index after it cut its annual net loss forecast on Tuesday.
Panasonic rose 3.84% after the electronics conglomerate said its battery business supplying Tesla Inc would be profitable this fiscal year, and raised its full-year operating profit forecast by more than half. (Reporting by Junko Fujita; Editing by Devika Syamnath)