5:00AM New York, 7:00PM Tokyo - Japan’s industrial production rises by a revised 1.6% in February.

Japan stock averages gained for a third day after earnings at JP Morgan Chase and Wells Fargo showed reduced exposure to the sub-prime mortgage crisis.

Market sentiment

In Tokyo trading Nikkei 225 rose 1.92 or 252.17 at 13,398.30, and the broader Topix Index gained 1.7% or 21.44 to 1,293.32.

In the first section of the Tokyo Stock Exchange 8.7 billion shares valued at 1 trillion yen were traded and in the second section 271 million shares worth 7.7 billion yen changed hands.

Of the Nikkei 225 stocks 179 gained, 38 declined and 8 were unchanged. NSK led advancers in the Nikkei 225 index shares with a rise of 9.37% followed by Shinsei Bank Limited increasing 6.50%.

Japan industrial production rises 1.6% in February

The Ministry of Economy, Trade and Industry reported in the Revised Indices of Industrial Production on its Web site today that industrial production index increased by a revised 1.6% in February at 110.2 from the 1.2% drop that had earlier been reported.

According to the revised figures, shipments and inventories also advanced 1.2% and 0.19% respectively.

Increases raised expectations that Japan’s economy will be able to withstand the persistent credit market problems related to the U.S. banks and financial institutions.

The revision was prompted by the adjustment of the base year from 2000 to 2005 and the alignment of the weighted items to reflect the current production patterns.

JP Morgan and Wells Fargo earnings cheer markets

The Financial Times reported yesterday that first quarter earnings from JP Morgan Chase & Co and Wells Fargo & Co that were in line with market expectations helped to cheer investors. Earnings at both banks were sharply lower and JP Morgan reported $2.6 billion asset write downs reflecting losses in leveraged loans and mortgage securities.

First quarter profit at JP Morgan and Wells Fargo dropped 50% and 11% respectively.

In particular, JP Morgan set aside $4.42 billion in loan losses and $2.6 in write-downs tied to mortgages, loans to fund corporate buyouts and tight credit markets, while provision for credit losses jumped from $2.5 billion at the end of 2007 to $12.6 billion.

Also Wells Fargo revealed that in spite of the housing slump mortgage applications rose 45% from the fourth quarter 2007 to top $132 billion in the first quarter of 2008.

Gainers & Losers

NSK Limited led advancers in the Nikkei 225 index shares with a rise of 9.37% followed by increases in Shinsei Bank Limited of 6.50%, in Okuma Corp. of 6.38%, in Shinko Securities of 6.08%, and Sumitomo Heavy Industries of 6.04%.

Other financial stocks gained as well on speculation that credit market may stabilize. Mitsubishi UFJ Nicos rose 4.09%, Mizuho Financial Group gained 5.41% and Mizuho Trust & Banking advanced 3.90%.

Technology stocks gained as well after International Business Machines Corp. said yesterday earnings this year will beat its earlier forecasts. Advantest Corp. surged 5.11% and Canon spiked 5.10%.