Japan's Nikkei average rose 0.67 percent to its highest close in 7 years on Monday after a strong jobs report in the US, and higher-than-expected machinery orders in Japan spurred buying of machinery and tech stocks including Fanuc Ltd.
But shares of real estate firms such as Mitsui Fudosan and Mitsubishi Estate weighed on the market after the data fuelled concern about higher interest rates.
Shares of Sony Corp edged 0.2 percent lower to 6,530 yen after a company executive told Reuters in an interview in San Francisco that it plans to cut the price of its PlayStation 3 consoles in the United States by $100, or 17 percent, to $500.
"Strong US jobs data last week largely supported the market sentiment as investors bought high-tech shares on receding concern about the US economy," said Tsuyoshi Segawa, equity strategist at Shinko Securities.
Segawa said investors were also encouraged by a surge in Taiwanese stocks as they increasingly look at that Asian market as a leading indicator for US and Japanese high-tech shares. Taiwan stocks rose 1.98 percent on Monday to a seven-year closing high with the main TAIEX share index closing at 9,369.84, while the semiconductor sub-index rose 2.46 percent.
Yutaka Miura, deputy manager of the equity information department at Shinko Securities, said the stronger-than-expected data would also likely cause concerns about rate hikes by the Bank of Japan, capping a further advance in the market. The benchmark Nikkei finished up 121.04 points at 18,261.98, the highest close since May 2, 2000.
The broader TOPIX index climbed 0.71 percent to 1,792.23. Trade volume remained moderately slow, with 1.7 billion shares changing hands on the Tokyo exchange's first section, below last year's daily average of 1.9 billion shares. Advancing shares beat decliners by a ratio of more than two to one.hile Nikon Corp climbed 3.7 percent to 3,680 yen.
Technology and industrial stocks were among the best performers in the United States on Friday after the Labour Department's monthly report on job creation topped expectations. Shares of Fanuc and other machinery stocks also advanced after data showed Japan's core private-sector machinery orders rose 5.9 percent in May from the previous month, beating economists' consensus forecast for a 2.3 percent rise.
Industrial robot maker Fanuc rose 1.3 percent to 12,860 yen, construction machinery maker Komatsu Ltd added 1.9 percent to 3,800 yen, and machine tool producer Okuma Holdings Inc gained 1.2 percent to 2,080 yen.
But property issues fell with Mitsui Fudosan losing 0.9 percent to 3,490 yen, while Mitsubishi Estate fell 1.5 percent to 3,340 yen. "The mood in the market is not to aggressively buy real estate stocks as the possibility of rate hikes in August has increasingly become higher," said Kenichi Hirano, operating officer at Tachibana Securities.
Many in financial markets expect the Bank of Japan to raise its key policy rate target to a 12-year high of 0.75 percent in August, after elections for parliament's upper house. Meanwhile, the top monetary policy official of Japan's ruling party said on Monday current economic conditions do not warrant an interest rate hike in August, countering market expectations of a central bank's move next month.
Elsewhere, Marubeni Corp, Japan's fifth-biggest trading company, gained 3.8 percent to 1,094 yen, extending gains on higher commodity prices after oil prices hit an 11-month high above $76 a barrel on Friday. In addition, news that Toshiba Corp is in talks to sell 10 percent of its stake in nuclear percent to 5,170 yen and Nippon Chemiphar Co Ltd added 2.5 percent to 532 yen.
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