Mitsubishi Motors shares have risen on media reports the auto maker will compensate customers after it admitted falsifying fuel efficiency data.
Shares in the Japanese auto maker have lost some 50% of their value since the scandal. On May 10 shares rose 1.9%.
The Nikkei 225 benchmark index closed 2.2% higher at 16,565.19 points.
Meanwhile, Takata shares shed 7.4% on reports of an additional seven million recalls of its faulty airbags.
On May 9, Takata had also said it was expecting a loss instead of a profit for the fiscal year until March due to the soaring costs of their global airbag recall.
In China, markets were reacting to fresh inflation data showing April’s price increases steady from the previous year.
China’s consumer price index (CPI) was up by 2.3% on the same month the previous year.
The Shanghai Composite index was flat at 2,832.59 points at the close of Tuesday’s session. Meanwhile Hong Kong’s Hang Seng closed higher by 0.4% at 20,242.68.
Australia’s ASX/200 finished trading 0.4% higher at 5,342.80, despite the country’s commodity giants suffering from lower iron ore prices.
Mitsubishi Motors’ domestic orders for its vehicles have halved since the Japanese automaker revealed last week that it had been falsifying fuel efficiency tests.
Company president Tetsuro Aikawa said the situation was “very serious” but said he had no plans to resign immediately.
Tetsuro Aikawa said he did not know if sales abroad had been affected yet.
Mitsubishi shares have more than halved since the scandal broke.
Investors are worried that Mitsubishi Motors – Japan’s sixth-largest automaker – will face fines and compensation claims.
Last week, Mitsubishi admitted that it had falsified fuel economy data for four “minicar” models sold only in Japan.
The inaccurate mileage tests involved 157,000 of its eK wagon and eK Space, and 468,000 Dayz and Dayz Roox vehicles produced for Nissan. All were sold in Japan only.
On April 26, Mitsubishi admitted to manipulating test data for the past 25 years, far longer than initially thought.
The company’s board has formed a panel to investigate the case, and US regulators have also launched an investigation into whether car models complied with their fuel economy rules.
At a news conference on April 27, Mitsubishi Motors said that because of uncertainty about the potential damage to its brand it could not make forecasts for the financial year 2016-2017.
However, Tetsuro Aikawa was able to announce better-than-expected results for the year ending in March 2016.
Mitsubishi Motors reported that its operating profit rose 1.8% to 138.4 billion yen ($1.2 billion) while revenue increased by 4% to 2.27 trillion yen.