Japan's Nikkei stock average rose 1 percent on Wednesday after reports of an aid plan for heavily indebted Greece eased worries about global economic stability, while a weaker yen buoyed exporters such as Canon Inc.
Toyota Motor Corp edged up, with some market players saying its share price may have bottomed and despite a new recall of Camry sedans for steering problems.
Honda Motor Co slipped after saying on Wednesday it would recall 437,763 vehicles globally for defective airbags.
A senior German ruling coalition source said euro zone governments have decided in principle to help Greece, calming investors after risk aversion increased in the past two weeks on concern about the fiscal stability of Greece, Portugal and Spain.
"Certainly there are reports about support for Greece, but nothing concrete's been decided. So while downward pressure has definitely decreased, there's still no real reason to buy," said Hideyuki Ishiguro, a strategist at Okasan Securities.
Japan's core machinery orders rose more than expected in December from the previous month, easing concern that capital spending may continue to slump and shackle the economy's fragile recovery, and while this boosted individual machinery shares, gains were expected to be limited.
"The machinery orders data is extremely volatile -- the month before this orders really plunged. So while today's figures aren't bad for the market, it's hard to say that this recovery will go on, so few investors really want to buy on this," said Ishiguro.
The benchmark Nikkei gained 102.88 points to 10,035.78, while the broader Topix rose 0.8 percent to 888.83. Volume slipped a bit the day before a market holiday on Thursday.
Market players said that investors, including commodity trading advisors (CTAs) appeared eager to sell a bit above 10,000, and that this would also limit gains.
In the latest blow to its reputation, Toyota said in a document sent to U.S. dealers and obtained by Reuters that 2010 Camrys equipped with a 4-cylinder engine might have a shorter-than-required power steering pressure hose in their engine compartments.
Toyota shares rose 0.3 percent to 3,385 yen after briefly dipping into negative territory, while Honda slipped 0.2 percent to 3,055 yen.
Shares of machinery makers gained after core machinery orders rose 20.1 percent, with machine tool maker Okuma Corp climbing 2.7 percent to 539 yen and Amada Co, a maker of metal-processing machines, rising 4.3 percent to 651 yen.
Industrial robot maker Fanuc Ltd advanced 2.4 percent to 9,000 yen.
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