Japan's Nikkei share average inched up on Tuesday as investors picked up stocks that were oversold during a disappointing earnings season, with hopes for fresh global stimulus continuing to underpin quiet markets.
Softbank Corp, a defensive favourite, rose 2.9 percent to a 15-month high as the most traded share on the main board.
The Nikkei rose 0.5 percent to 8,929.88 points after briefly peeping above its 200-day moving average at 8,959.17, a move analysts said showed optimism, but ultimately a lack of conviction.
"It seemed that the aggressive short selling that had been going on for a couple of months has kind of dried up," said a senior trader at a foreign bank. "Global quantitative easing is being priced in but we find ourselves with nothing to verify or dismiss that."
Hopes that central banks will further ease policy to boost a flagging global economy helped the Nikkei to its biggest weekly gain last week since February, despite no sign of imminent institutional action.
"I'm getting requests from people who want to look into fundamentally okay companies that will survive and have been beaten down (due to poor earnings) which suggests they're looking to be a bit more invested when they come back from the holidays," the trader said.
Volume on the main board recovered to 100 percent of its 90-day average after slumping to its lowest since December 30 on Monday as Japan's summer holidays conspired with a lack of data.
All Nippon Airways Co Ltd <9202.T> rose 2.3 percent, hitting 180 yen for the first time since striking a 36-year low on August 3 following the announcement of a secondary public offering of 175 billion yen.
Toshiba Corp slipped 3.7 percent after the Yomiuri business daily reported that it will likely sell a 16 percent stake in nuclear power plant company Westinghouse Electric Co out of the 67 percent it already owns.
"It could be that people have taken it badly because they think Toshiba are divesting themselves of the nuclear business, one of the pillars of their company along with NAND chips, although I personally would have expected the opposite reaction as it will improve their balance sheet," said a partner at a foreign hedge fund.
Tokyo Electron's pledge to acquire chip-equipment maker FSI International Inc
The broader Topix index rose 0.4 percent to 749.53, as its 100-day moving average broke below the 200-day moving average to form a "dead cross", a bearish signal.
However, a trader said it could be a contrarian indicator because its opposite, a bullish "golden cross", preceded a sell-off in April.
Rough seas
Shippers dropped 1.7 percent after JPMorgan downgraded the sector to "neutral" from "overweight".
"We think earnings momentum will probably deteriorate over the next 3-6 months, with sector companies lowering guidance and consensus estimates coming down," analyst Hitoshi Hosoya said in a note.
JPMorgan lowered its rating on shipper Mitsui O.S.K. Lines Co Ltd to "neutral" from "overweight" and removed it from its Analyst Focus List as a Most Preferred stock, aiding in its fall of 2.2 percent.
