TOKYO – Japanese stocks surged Tuesday as investor sentiment improved after a long weekend, lifted by a weaker yen, stable U.S. stock markets and reports that Panasonic Corp. may acquire rival Sanyo Electric Co.
The benchmark Nikkei 225 stock average jumped 537.62, or 6.3 percent, to 9,114.60, reversing Friday's 5 percent drop. The broader Topix index added 5.03 percent to 910.70.
The looming U.S. presidential election results, expected Wednesday morning in Asia, kept volume relatively light, analysts said.
Tokyo markets were closed Monday for a national holiday.
Weekend reports Panasonic may acquire rival Sanyo sent share prices of the Japanese electronics makers soaring.
A Sanyo-Panasonic entity would create Japan's biggest electronics maker, surpassing Hitachi Ltd., and would also be among the biggest in the world. Officials from both companies denied Tuesday that any deal has been reached.
Sanyo shares were untraded because of a rush of buy orders, and was at a bid-only 195 yen ($1.96). It had closed Friday at 145 yen ($1.46). Panasonic also shot up, closing up 6.8 percent at 1,614 yen.
Also boosting exporters was a weaker yen, which stood at 98.63 to the dollar Tuesday afternoon. On Friday in Asia, the dollar was trading around 97-yen levels. On Oct. 24, it had fallen to 91 yen.
Toyota Motor Corp. rose 4.2 percent to 3,850 yen, and Sony Corp. gained 6.5 percent to 2,365 yen.
Banks rallied after Credit Suisse upgraded its rating on the sector to "overweight," saying in its report that "all of the negative news concerning banks' deteriorating earnings is probably out now."
The investment bank also cited a threefold increase in the government's emergency credit guarantee program as part of Prime Minister Taro Aso's second emergency stimulus package announced last week.
"Not only is this likely to reduce (small and midsize enterprise) bankruptcies temporarily, it should also boost banks' lending balances considerably," said analyst Shinichi Ina.
Mitsubishi UFJ Financial Group Inc. advanced 4.9 percent to 627 yen, and Sumitomo Mitsui Financial Group Inc. jumped 7.9 percent to 412,000 yen.
Among notable losers, Nissan Motor Co. shed 10.6 percent to 441 yen after reporting Friday a 39 percent drop in fiscal second quarter profit. The plunge triggered speculation that the automaker could slash its full-year dividend.