Japan's Nikkei average rose to a fresh five-year closing high on Wednesday, bolstered by gains in property shares such as Mitsubishi Estate Co Ltd amid hopes Japanese asset values will rise after years of deflation.
While some fund managers rushed to buy winning sectors including property shares to improve their funds' performances ahead of the year-end, individual investors pushed up Softbank Corp to a five-year closing high.
The Nikkei rose for the third session in a row to finish up 2.02 percent or 316.31 points at 15,957.57.
Earlier it broke through the 16,000 level for the first time since October 2000.
The broader TOPIX index was up 1.39 percent at 1,636.38, its highest close since May 2000.
The Nikkei has risen some 780 points in the past three sessions, offsetting a three-day, 605-point fall late last week when a reversal of the dollar's uptrend in the past few months sent shares of exporters reeling.
Volatility in Japanese share prices has risen recently as institutional investors stay on the sidelines with the approach of the winter holiday season, making speculators the main market drivers, analysts said.
"The most symbolic stock for us to understand the current trend is Softbank, which has attracted buying by individuals and short-term dealers aiming for short-term capital gains," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC's equity planning and administration department. Internet firm Softbank, a favourite of individual investors due to its growth-minded business model, rose 8.5 percent to 12,790 yen, taking its gains this week to 18 percent.
Softbank and its affiliate, Yahoo Japan Corp, said on Monday they had formed a company to broadcast television programmes via the Internet.
One fund manager said the Tokyo market looks overheated given share prices over 20 times earnings on average. Wednesday's gains were partly attributed to last-minute efforts by fund managers to improve the return of their funds.
The real estate sector IRLTY, which has risen 94 percent so far this year and is the second-biggest gaining sector after mining stocks, rose 4.6 percent on Wednesday.
The sector jumped 6.9 percent on Tuesday on news that American International Group Inc may buy a property in central Tokyo in a deal newspapers said would be double or triple the prices for the area in the latest government survey.
Mitsubishi Estate, Japan's biggest real estate company, soared 9.1 percent to 2,390 yen after hitting a high of 2,570 yen, its best level since 1990, around the peak of Japan's asset price bubble. NTT Urban Development Corp rose by its daily limit of 100,000 yen, or 15.1 percent, to 763,000 yen. Sankei Building Co Ltd rose 9.9 percent to 1,042 yen. The two firms have real estate assets in the central Tokyo area.
Trade was the busiest in a week, with 2.58 billion shares changing hands on the Tokyo exchange's first section.
Advancers beat out decliners 1,215 to 377.
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