TOKYO, Feb 3 (Reuters) - Japanese shares rose 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 edged up 0.56% to 28,520.55 as of 0204 GMT, while the broader Topix gained 0.70% to 1860.12.
“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.
Mitsubishi Motor, up 12.15%, led gains on the Nikkei 225 index after it cut its annual net loss forecast on Tuesday.
Panasonic rose 3.11% 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.
Toyota Motor jumped 3.66% after its autoparts affiliates Denso and Aisin Seiki raised their outlook. Denso gained 3.26% and Aisin Seiki rose 1.9%.
Pandemic-beaten transport shares gained, with West Japan Railway rising 5.19% and East Japan Railway gaining 3.47%. Japan Airlines jumped 4.2% while ANA Holdings rose 1.7%.
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.
Reporting by Junko Fujita; Editing by Devika Syamnath