TOKYO, March 2 (Reuters) - Japanese stocks surged to more than three-week highs on Wednesday morning, thanks to Wall Street’s strongest session in a month after U.S. factory and construction data suggested the world’s biggest economy is regaining momentum.
The Nikkei share average climbed 4 percent to 16,725.71 in midmorning trade - the highest point for the benchmark in just over three weeks.
Japan’s exporters, who tend to benefit from a weakening currency, put up a strong performance after the U.S. dollar climbed above 114 yen for the first time in more than a week following the upbeat U.S. data. Panasonic Corp rose more than 7 percent, Sony Corp gained more than 5 percent and Bridgestone Corp climbed 4.5 percent.
The strongest signs of health in the U.S. economy came in the form of data showing that U.S. manufacturing appeared to stabilize in February while construction spending rose to more than an eight-year high in January.
“Following the selloff and the fears of recession that emerged early in the new year people pulled back aggressively from their previous expectations about how a rate hike from the Fed might unfold,” said Stefan Worrall, director of Japan equity sales at Credit Suisse.
“Suddenly some of this lost confidence has been restored as we’ve seen a lot of recent economic data from the U.S. beating expectations.”
Traders said any suggestion that the U.S. economy may be losing steam were also refuted by other data on Tuesday. U.S. automobile sales remained at levels consistent with strong consumer spending, boosting sentiment for Japan’s automakers, which rely heavily on export sales.
Shares of Toyota Motor Corp rose 4.9 percent while Nissan Motor Co Ltd gained 4.1 percent and Mazda Motor Corp soared 6.9 percent.
Toy and game software maker Bandai Namco Holdings bucked the morning’s strength, falling 2.6 percent after Nomura Securities cut its stock’s rating to ‘neutral’ from ‘buy,’ citing higher than expected game development costs.
The broader Topix climbed 3.8 percent to 1,349.99 with each of its 33 subindexes in positive territory during midmorning trade.
The JPX-Nikkei Index 400 rose 3.9 percent to 12,241.50. (Reporting by Joshua Hunt; Editing by Shri Navaratnam)