TOKYO, Feb 10 (Reuters) - Japanese stocks erased early losses and rose on Wednesday as an earnings forecast upgrade from Honda backed expectations for an improving outlook for corporate profits amid an improving global economy.
The Nikkei index gained 0.01% at 29,503.60 by 0203 GMT, with energy and consumer cyclical companies leading gains. The broader Topix rose 0.29% to 1,931.44.
Since the start of the year, the Nikkei has rallied more than 7% to its highest level since 1990 as investors buy Japanese exporters that are expected to benefit as the global economy recovers from the COVID-19 pandemic.
Stocks have risen so quickly that some traders warn that a correction lower is overdue, but most analysts say the Nikkei is still on track to reclaim the psychological important 30,000 mark because the earnings season so far been better than expected.
“A lot of investors are buying on dips, which shows that the mood is positive,” said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
“The global economic recovery will become more concrete as the year progresses, which benefits Japanese companies that are sensitive to global growth.”
The stock that gained the most among the top 30 core Topix names was Honda Motor Co Ltd, which rose 6.38%, after the automaker upgraded its earnings forecasts.
Toyota Motor Co also rose 2.5% ahead of its earnings report due later in the day.
The second-biggest gainer was Nintendo Co Ltd, which rose 2.73%.
The underperformers among the Topix 30 were Daiichi Sankyo Co Ltd, down 1.68%, and Astellas Pharma Inc, down 1.50%.
So far this earnings season, 80% of Japanese companies have beaten forecasts for the December quarter, according to Refinitiv data.
There were 131 advancers on the Nikkei index against 89 decliners.
Reporting by Stanley White; Editing by Amy Caren Daniel