The Nikkei edged up 0.07 percent on Thursday as investors bought Komatsu Ltd and other machinery stocks ahead of machinery orders data on Friday, while Softbank Corp gained as industry data showed it added the most users in May. Sony Corp ended down 1.2 percent at 6,790 yen after its game unit said it plans to cut jobs in the United States.
Fujitsu Ltd gave up 3.2 percent to end at 820 yen after announcing it had found fictitious transactions at a subsidiary. Some analysts said investors engaged in arbitrage trading sold bond futures and bought stock futures. Japanese government bond futures extended their losses to a 10-month low on Thursday.
The Nikkei got off to a feeble start following a tumble in the US and European stocks, but recovered on strong interest to buy stocks on dips. "It's very unlikely that the companies that benefit from the expansion of the global economy will falter. Besides, Japanese companies have maintained competitive edges internationally," said Toru Kitani, a senior investment manager at Sompo Japan Asset Management.
"Before, people would think Toyota Motor Corp has such competitiveness, but now investors are noticing that Komatsu and parts makers and others are also competitive," he said. The Nikkei rose 12.45 points to 18,053.38 and the broader TOPIX index inched up 0.07 percent to 1,779.72.
Trade volume also swelled with 2.79 billion shares changing hands, the highest volume in about three months. Advancers outpaced decliners 899 to 702. Machinery stocks rose on expectations that machinery orders data for April could come in strong. Orders are forecast on average to have risen 4.5 percent month on month, according to economists surveyed by Reuters.
Komatsu, the world's second-largest maker of construction machinery, rose 2.9 percent to 3,540 yen and Japan Steel Works Ltd, a cast and forged steel products maker, rose 2.7 percent to 1,959 yen.
Takeda Pharmaceutical Co, Japan's largest drugmaker, fell 1.8 percent to 8,190 yen after its unit Takeda Pharmaceuticals North America Inc said it would add a warning to the label of its diabetes drug Actos to increase awareness of the risk of congestive heart failure.
Meanwhile, Bull-Dog Sauce said after the market closed that it would propose issuing equity warrants at its shareholder meeting later this month to counter a take-over bid by US hedge fund Steel Partners. Shares of property companies, which tend to shoulder heavy debt to develop projects, fell due to concerns about the impact of a possible Bank of Japan interest rate hike on their earnings. Second-ranked property firm Mitsubishi Estate Co fell 1.3 percent to 3,770 yen.
In particular, rising yields on government bonds hit shares of real estate investment trusts (REITs), which have attracted buyers for their relatively high dividend payments. The Tokyo Stock Exchange's REIT index sank 3.3 percent to its lowest in more than a month. "The interest rate factor will divide winners and losers from now on," said Masayoshi Okamoto, head of dealing at Jujiya Securities.