* Nikkei resistance seen near 9,500
* Market shrugs off GDP as in line with expectations
* Mitsubishi Corp buoyed by ratings upgrade
* Firmer yen drags on exporters
By Elaine Lies
TOKYO, May 20 (Reuters) - Japan's Nikkei stock index rose 0.4
percent on Wednesday with trading houses up after a brokerage
upgraded Mitsubishi Corp <8058.T>, but gains were limited as a
slightly firmer yen dragged on exporters such as Honda Motor Co
<7267.T>.
Nissan Motor Co <7201.T> rose 4.8 percent after the automaker
said on Tuesday orders for its low-emission cars are up 30
percent in Japan so far in May from the same period a year
earlier, helped by new government tax incentives for low-emission
vehicles. []
First quarter gross domestic product (GDP) shrank a record 4
percent as a plunge in global demand drove Japan's export-driven
economy further into recession, but that was smaller than the 4.2
percent drop expected by economists, and the market shrugged it
off. []
"There was some reassurance from the GDP figures coming in
about as expected," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
"The market was a bit disappointed by yesterday's U.S.
housing figures, but recent indicators have been coming in quite
strong, so people were probably expecting too much."
U.S. housing starts and permits fell unexpectedly to record
lows in April.
Investors were heartened, though, by the Chicago Board
Options Exchange Volatility index <.VIX>, known as Wall Street's
"fear gauge", falling below 30 for the first time since the
collapse of Lehman Brothers eight months ago. []
The benchmark Nikkei <> gained 40.17 points to 9,330.46,
while the broader Topix <> rose 0.4 percent to 883.06.
Resistance was seen just below 9,500, where the Nikkei's
200-day moving average comes in. The Nikkei touched a six-month
high of 9,503 on May 11 but has been unable to break higher.
"Right now, there aren't a lot of reasons to buy," said
Takahiko Murai, general manager of equities at Nozomi Securities.
EXPORTERS ENERVATED, TRADERS TOUGH
The yen edged up 0.2 percent against the dollar after falling
the previous day following improved business sentiment in
Germany, which helped lift investor confidence and boosted the
appeal of riskier assets. []
By late morning it was trading around 95.73 yen, off a
two-month low of 94.55 set earlier in the week. <JPY=>
Honda slipped 1.3 percent to 2,670 yen and Toyota Motor Corp
<7203.T> lost 1.1 percent to 3,640 yen. Kyocera Corp <6971.T>
edged down 0.5 percent to 7,430 yen.
But trading houses powered higher on a combination of strong
oil prices and a ratings upgrade for Mitsubishi, the largest
trading house in Japan.
Oil hovered just below $60 a barrel after finishing almost 1
percent higher the previous day as a flurry of refinery problems
stoked supply fears at the start of the U.S. summer driving
season. [] <CLc1>
Goldman Sachs upgraded Mitsubishi to "buy" from "neutral",
saying it appears to be undervalued when compared to global
resource stocks like BHP Billiton <BHP.AX> <BLT.L>.
Goldman Sachs also raised its rating for the trading company
sector to "attractive" from "neutral," saying the global economic
downturn has come to a halt.
Mitsui & Co <8031.T> jumped 4.4 percent to 1,160 yen and
Itochu Corp <8001.T> advanced 3.3 percent to 668 yen.
The wholesale subindex <.IWHOL.T>, which includes trading
houses, was up 3 percent, the biggest gain among the subindexes.
Shares of Mitsubishi UFJ Financial Group <8306.T>, Japan's
largest bank, fell 0.8 percent to 612 yen after it reported a
$2.2 billion quarterly loss, its second in a row, hit by a
damaging recession and hefty losses on its stockholdings.
[]
Trade was light on the Tokyo exchange's first section, with
979 million shares changing hands, below last week's morning
average of 1.2 billion.
Advancing stocks outnumbered declining ones, 952 to 586.
(Reporting by Elaine Lies; Editing by Joseph Radford)
