By Hideyuki Sano
TOKYO (Reuters) - Japanese shares rebounded on Tuesday, taking heart from gains on Wall Street on the back of relief that Crimea's vote to join Russia passed without major violence and on fairly upbeat U.S. data.
The Nikkei share average rose 1.2 percent to 14,452.33, recovering from a six-week closing low hit on Monday, though it is still down over five percent from a five-week high around 15,300 reached on March 7.
Worries about the economic impact of Tokyo's planned sales tax hike in April, slowing growth in China and the crisis in Ukraine have weighed on the market in recent weeks.
Overnight gains on Wall Street, supported by data showing manufacturing output recorded its largest increase in six months in February, helped improve the mood.
Traders said that cautious investors were now looking ahead to Russian President Vladimir Putin's address to the parliament on Crimea later in the day.
"I think markets had already expected Crimea's independence. We have to see what Putin will say but assuming he does not make bombshell announcements, the Nikkei is likely to test this month's high again," said Soichiro Monji, chief strategist at Daiwa SB Investments.
Short-covering was likely driving much of the buying on Tuesday, especially as the ratio of short-selling in overall sales in the Tokyo Stock Exchange hit a record high of 36.17 percent the previous day.
Mitsubishi Electric <6503.T> rose 3.1 percent after the company raised its annual dividend payouts more than expected to 17 yen, the highest level since the company started closing book on an annual basis in 1976.
Glass and ceramics companies were the top performer in the TSE's 33 sector subindexes after their sharp fall on Monday.
"Some of those who sold yesterday are probably buying back today," said Hideyuki Ishiguro, senior strategist at Okasan Securities.
"The market is likely to regain stability but Japanese shares' performance is exceptionally poor since concerns over Ukraine hit global markets," suggesting domestic concerns were also having a bigger impact on the market, he added.
One big worry is that a planned sales tax hike in April could hurt consumption at a time when overall economic growth has slowed in recent quarters.
Fading hopes of further near-term monetary stimulus by the Bank of Japan have also dragged on sectors such as real estate and securities brokerages, which were big beneficiaries of the central bank's aggressive easing last year.
Real estate companies were up 0.5 percent, underperforming the overall market and were still down over 21 percent so far this year.
The broader Topix index rose 1.0 percent to 1,165.86 while the JPX-Nikkei Index 400, a gauge comprising firms with high return on equity and strong corporate governance, rose 1.0 percent.
(Reporting by Hideyuki Sano; Editing by Shri Navaratnam)
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