The Japan Thread

TOKYO (AFX) - Share prices closed sharply higher for the third consecutive
session, with the benchmark Nikkei index settling at its strongest level in more
than five years, supported by optimism over the economy and a pullback in the
yen, dealers said.
Foreign investors led the buying spree, having placed net buy orders before
the market opened for the third straight day.
The Nikkei 225 Stock Average finished up 316.31 points or 2.0 pct at
15,957.57, its highest close since Oct 6, 2000 when it settled at 15,994.24. At
one stage, the blue-chip index hit an intraday peak of 16,010.17.
The broader TOPIX index of all First Section shares edged up 22.39 points or
1.4 pct to 1,636.38, off a high of 1,641.86.
Gainers swamped losers 1,215 to 377, with 75 issues unchanged.
Volume rose to 2.58 bln shares from 2.17 bln shares yesterday.
Commerz International Capital Management (Japan) president and chief fund
manager Hitoshi Yamamoto said market players snapped up shares on continuing
optimism Japan will soon beat deflation and a weaker yen helping shares of
exporters.
In late afternoon currency trade, the dollar was quoted at 117.16 yen,
compared to 116.65 yen in late Tokyo trading yesterday.
"Local market sentiment was also buoyed by overseas investors, who had
placed large net buy orders ahead of the market opening today. This helped
prompt retail investors here to step up purchases," said Hiroyuki Nakai, chief
strategist at Tokai Tokyo Research Center.
Gains were broad-based with property companies, automakers, non-life
insurers, technology firms and machinery makers among notable winners.
In the construction sector, Shimizu jumped 48 yen or 5.9 pct to 864, with
Kajima up 34 yen or 5.4 pct at 666. Obayashi, the fourth-largest construction
firm in Japan, leapt 37 yen or 4.5 pct to 866.
Non-life insurers surged on hopes they would benefit from the economic
recovery, which could inflate the value of land held by these companies, with
buying interest spilling over to real estate firms.
Mitsui Sumitomo jumped 66 yen or 4.6 pct to 1,500, while industry leader
Millea surged 80,000 yen or 4.0 pct to 2,090,000. Property developer Mitsubishi
Estate jumped 200 yen or 9.1 pct to 2,390.
The high-tech sector as well as automakers gained on the softer yen.
Advantest, the world's largest maker of chip-testing equipment, rose 290 yen
or 2.6 pct to 11,270, while Tokyo Electron was up 140 yen or 1.9 pct at 7,370.
Carmakers advanced, led by market leader Toyota which edged up 200 yen or
3.5 pct to 5,980, while Honda, the third-largest in Japan, increased 110 yen or
1.6 pct to 6,810.
Sanyo Electric rose 6 yen or 2.2 pct to 283 on hopes that the struggling
maker of consumer electronic products will secure fresh capital of 300 bln yen
from Sumitomo Mitsui Banking Corp, Goldman Sachs and Daiwa Securities SMBC Co.
But Nippon Mining Holdings fell 20 yen or 2.3 pct to 855 following a report
it has decided to halt output of electrolytic copper foil in the US by the end
of next March in a bid to get rid of loss-making activities.