Japan's Nikkei rose 2.3 percent to snap a five-day losing streak on Friday, boosted as worries about the results of European bank stress tests eased and by robust U.S. corporate earnings, according to Reuters. Short-covering helped buoy the benchmark after it shed nearly 6 percent in the past five days, market players said, though gains were kept in check due to worries about a strong yen and its impact on domestic corporate earnings. Charts grew brighter as the Nikkei pulled away from oversold territory, with its slow stochastic -- a measure of how oversold the market is and whether it is in a short-term up or down trend -- rising after a bullish cross. But market players noted that volume was only moderate. "This jump is mainly coming from short-covering, it's not a move that will really lead the Nikkei sharply higher," said Kenichi Hirano, operating officer at Tachibana Securities. "But if we manage to close at this level, we may be set for more gains next week. And while it's probably not good to be over-optimistic, I think the stress test results are unlikely to be that harsh." The closely watched results of European banks' stress tests, both the aggregate outcome and those of individual banks, will be released later in the day. The Nikkei pared some gains late in the session after a Spanish newspaper said several Spanish savings banks had failed the stress tests. In a broad-based advance, the Nikkei rose 210.08 points to 9,430.96 and marked its biggest one-day percentage gain since July 14. It edged up a mere 0.2 percent on the week. The broader Topix rose 1.9 percent to 841.29. Separately, the Tokyo Stock Exchange is considering extending its trading hours, a person with knowledge of the matter said -- a move that market players said could help it attract investors and stem a decline in its global competitiveness. The exchange, the world's second largest, may start the trading day earlier and finish later, and is also considering eliminating a break between the morning and afternoon sessions, the person said. For the Nikkei, resistance is seen at the level of its 25-day moving average around 9,600. The 25-day moving average is a proxy for a one-month moving average and is closely watched in Japan. But market players said a bit of yen weakness was need for Tokyo stocks to gain genuine strength. "The gains lack strength because while earnings are on a strong footing, there is persistent concern about the impact of the recent strengthing in the yen on future earnings at home," said Masaru Hamasaki, senior strategist at Toyota Asset Management. Support for the Nikkei likely lies at 9,200, just under its July 1 close, which was a seven-month closing low, market players said. HITACHI JUMPS Hitachi rose 4 percent to 340 yen after the company's chairman told Reuters the country's biggest electronics maker is likely to have achieved better-than-targeted earnings in April-June. JFE Holdings Inc, Japan's second-biggest steelmaker, jumped 5 percent to 2,698 yen after a Bloomberg report that it plans to invest about $1 billion in India's JSW Steel Ltd, citing a person with knowledge of the deal. Komatsu Ltd and other construction machinery makers stood out after Caterpillar reported a stronger-than-expected quarterly profit and raised its full-year outlook, citing sales growth in emerging markets. Komatsu jumped 4.3 percent to 1,796 yen and Hitachi Construction advanced 4 percent to 1,776 yen. Semiconductor-related shares rose in the wake of gains by their U.S. peers on Thursday and after Microsoft Corp reported a 48 percent rise in quarterly profit after the bell, easily beating Wall Street forecasts. Chip equipment maker Tokyo Electron gained 3.1 percent to 4,670 yen, and stepper maker Nikon climbed 2.7 percent to 1,502 yen. Trade was moderate, with 1.96 billion shares changing hands on the Tokyo exchange's first section. Advancing stocks outnumbered declining ones by nearly 7 to 1.
