Japan's broad TOPIX share index rose 0.46 percent to a third-straight four-year closing high on Tuesday as confidence about post-election Japan outweighed the urge to take profits and lifted brokers like Nikko Cordial Corp.
A landslide victory for Prime Minister Junichiro Koizumi's pro-reform coalition at a weekend poll had boosted stocks across the board on Monday, and that factor was again propping up large-cap blue chips such as Toyota Motor Corp and Sony Corp.
The value of the roughly 1,600 firms listed on the Tokyo bourse's first section MV1.rose to 410 trillion yen ($3.719 trillion), up 16 percent this year.
On Monday, the total cleared 403 trillion yen, the level when the Tokyo market welcomed Koizumi's "reforms without sanction" speech on May 7, 2001, a few weeks after he became prime minister. The value had fallen to a low of 221 trillion yen in March 2003.
The TOPIX index of all first-section issues ended up 5.96 points at 1,315.76, its highest close since June 8, 2001.
The TOPIX Core 30 index for large-cap stocks rose even more, closing up 0.7 percent at 815.16.
The 225-stock Nikkei average edged up 0.04 percent to 12,901.95, its highest close since June 29, 2001.
"The extended rally in large-cap stocks shows that Japan-buying has never been on hold," said Tsuyoshi Segawa, equity strategist at Shinko Securities.
"Foreigners, in particular, are maintaining their high expectations for Japan and Japanese shares," he said.
Hajime Yagi, general manager at Meiji Dresdner Asset Management, shared that view.
Brokers advanced on expectations for improved profits. The securities industry subindex ISECU.jumped 2.8 percent, the top percentage gainer among the TOPIX's 33 subindices.
Nikko Cordial, Japan's third-biggest brokerage, advanced 4.5 percent to 1,176 yen after it forecast on Monday a stronger-than-expected 48 percent jump in first-half group net profit, helped by booming turnover in Tokyo stocks.
Mizuho, Japan's biggest bank and the most active issue by value, spent most of the morning in negative territory before climbing to a lifetime high of 645,000 yen.
It finished the day unchanged at 640,000 yen.
Toyota, the world's second-biggest auto maker, was up 1.3 percent at 4,720 yen. Consumer electronics giant Sony rose 2 percent to 4,050 yen as investors looked forward to a new business strategy to be unveiled on September 22.
Mitsubishi Motors Corp, Japan's only unprofitable auto maker, jumped 8.1 percent to 187 yen after comments by its president about a stronger-than-expected sales outlook in Europe.
But department store operator Mitsukoshi Ltd dropped 3.7 percent to 515 yen after UBS downgraded the company, saying Mitsukoshi's consolidated recurring profit was expected to miss management's target for the fiscal first half.
Trade was active, with 2.64 billion shares changing hands versus last year's daily average of 1.45 billion. Advancers beat out decliners, 932 to 563.