Tokyo's Nikkei share average rose 0.47 percent to another six-week closing high on Wednesday as investors optimistic about the US economy bought select exporters, while Sumitomo Metal Mining jumped on a new copper project. The Nikkei's winning rally, initially inspired by a recovery in US technology stocks, stretched to five sessions, the longest since February 24-March 7, when it gained for eight straight sessions.
But selling dragged down online brokerage Matsui Securities Co and its peers after Japan's top Internet portal, Yahoo Japan Corp, said it would link up with two of the country's leading brokerages as it seeks a foothold in the rapidly expanding market for stock trading by individuals.
The Nikkei recouped opening losses to rise 53.08 points to 11,329.67, its highest close since April 15.
The broader TOPIX index was up 0.45 percent at 1,149.49.
Analysts said views were mixed about the outlook for the US economy, Japan's key trading partner, and so were those for the Japanese economy, but some investors looking at the bright side were buying select firms seen to have better earnings prospects, such as glass maker Hoya Corp.
"The economy here is on a plateau. But so far there's no clear sign that it will deteriorate and that keeps bringing in buyers," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.
Analysts also said an overnight retreat on Wall Street was largely taken in stride.
"We are now less concerned about a rise in interest rates in the US choking its growth, the main factor behind the souring sentiment in US markets in the past," said Yusuke Sakai, manager of equities trading at Mizuho Securities.
The yield on the benchmark 10-year Treasury note has reversed course recently and fell below 4 percent on Tuesday to their lowest level since early February, easing concerns about the negative impact on the US economy from higher rates.
Hoya, which in April posted record annual profits on strong sales of glass used to make liquid crystal displays (LCDs) and hard disk drives, closed at a life high of 12,350 yen, up 1.8 percent from Tuesday.
Nikko CitiGroup raised its target price on Hoya to 14,600 yen from 13,900, saying glass magnetic disks would be the company's chief earnings driver in fiscal 2005/06 and 2006/07.
But Matsui Securities fell 2.8 percent to 1,218 yen.
Sumitomo Metal Mining Co rose 3.2 percent to 721 yen after the non-ferrous metal company and trading house Sumitomo Corp said on Wednesday they would take a total 20 percent stake in a copper mining project in Chile owned by a subsidiary of Phelps Dodge
Entertainment company Yoshimoto Kogyo Co jumped 3.8 percent to 1,880 yen on the Osaka Securities Exchange after the company and US chip maker Intel Corp said they would ally in content distribution.
Auto makers found support, helped by the dollar's firmer trend against the euro and the yen, with industry leader Toyota Motor Corp gaining 0.8 percent to 3,890 yen.
Honda Motor Co, which gets the bulk of its sales from the US market, rose 0.9 percent to 5,390 yen.
In Asian trade, the dollar was buying around 108.20 yen In New York, it hit a 1 1/2-month high of 108.53 yen.
Sumitomo Titanium Corp, the world's biggest supplier of titanium sponge used for aircraft, hit a life high of 14,980 yen before ending the day up 2.8 percent at 14,700 yen.
The stock has risen 150 percent so far this year as investors saw growth for the company in a pickup in demand from the aircraft industry.
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