The Nikkei booked its first rise in four sessions on Monday, gaining 1.52 percent as Softbank Corp advanced after the UK's Vodafone Group Plc said it is in talks to sell its struggling Japanese mobile phone business to the Internet firm.
Market sentiment was also boosted in late trade after Prime Minister Junichiro Koizumi urged the Bank of Japan, expected to soon end its ultra-easy monetary policy, to be prudent about its policymaking given the market's nervousness over such a move.
Koizumi told parliament the government and the central bank could not afford to make a mistake and derail Japan's economic recovery.
Yoshihisa Okamoto, senior vice-president at Fuji Investment Management, said: "Up until now, the market has been very worried about a BoJ policy shift, so I do think it showed a reaction when government officials took a concerned tone.
"It has undoubtedly given the market a sense of relief but the question now is how the Bank of Japan will respond."
The BoJ has said a steady rise in consumer prices, which advanced for a third consecutive month in January, would be a necessary precursor for a policy shift.
That ultra-easy policy has helped funnel a massive flow of cash into Japanese shares, lifting the benchmark Nikkei nearly 90 percent since the end of 2002.
The Nikkei finished up 237.82 points at 15,901.16. The broader TOPIX index rose 0.84 percent to 1,626.46.
Volume fell to its lowest level since last August, with 1.57 billion shares changing hands on the first section.
Advancers beat decliners by a ratio of 2 to 1.
Shares in Softbank rose 3.6 percent to 3,430 yen, after Vodafone confirmed a Reuters report that it is in talks to sell its Japanese unit to Softbank.
"Vodafone didn't have a good image in Japan. People said the service was bad and there weren't a lot of service branches. But I think things will change once Softbank is in charge," said Ken Masuda, a senior dealer in equities at Shinko Securities.
"By becoming one of Japan's big three mobile phone operators, there are a lot of positive expectations for Softbank. I think it is likely to charge users a lot less than Vodafone did," he said.
The news also helped boost shares in Yahoo Japan Corp, in which Softbank holds a 42 percent stake. The operator of Japan's largest Internet portal site added 7.4 percent to 146,000 yen.
But shares in mobile phone operators NTT DoCoMo Inc and KDDI Corp declined, due to concerns of increased competition.
NTT DoCoMo, Japan's top mobile phone operator, lost 1.2 percent to 169,000 yen, while second-ranked KDDI gave up 1.4 percent to 580,000 yen.
Toshiba Corp declined 0.3 percent to 653 yen. Toshiba, along with its partner SanDisk Corp, will jointly spend about 500 billion yen ($4.29 billion) to build a new flash memory plant in Japan, the business daily Nihon Keizai said on Monday.
Suzuki Motor Corp finished down 0.4 percent at 2,490 yen, after falling as much as 4.4 percent after the Nihon Keizai said top shareholder General Motors Corp planned to sell its entire 20 percent stake in Suzuki.
Both companies later issued a statement that they would not "fully" dissolve their capital alliance, leaving open the possibility of a partial sale, which helped ease investors' concerns.
Nomura Holdings Inc rose 3.9 percent to 2,290 yen after the country's biggest brokerage on Friday forecast a dividend payment of 48 yen per share for the business year ending this month, up from 20 yen apiece in 2004/05.
Comments
Comments are closed.