Japan's Nikkei share average edged up 0.3 percent on Thursday, rising for the sixth session in a row, led by Sony Corp and other exporters as the yen slipped in the currency markets. Seven & I Holdings rose 2.6 percent to 3,600 yen before Japan's biggest retailer announced a 6 percent gain in its March-May operating profit, helped by solid sales at its supermarket operations.
With Wall Street closed for Independence Day holiday, investors took their cue from a rise in European stock markets and bet on machinery and high-tech shares as the dollar rose slightly to 122.80 yen After the close of trade in Tokyo, the euro hit a record high above 167.20 yen
The benchmark Nikkei rose 52.76 points to 18,221.48, after inching closer to a seven-year intraday high of 18,300.39 hit in February. The broader TOPIX index gained 0.3 percent to 1,788.16. Among high-tech exporters, consumer electronics giant Sony rose 2.4 percent to 6,460 yen and Hitachi Ltd added 1.8 percent to 888 yen.
Komatsu Ltd, Japan's biggest construction machinery maker, gained 1.6 percent to 3,770 yen. "Large-cap stocks are being bought partly because of the yen, but also because many investors are re-investing their dividend incomes that were recently paid out," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
Trade remained thin, with just 1.67 billion shares changing hands on the Tokyo exchange's first section, down 13 percent from last year's daily average. On Wednesday trade hit a 2007 low of 1.52 billion shares. Advancing shares outnumbered decliners by a ratio of almost two to one.
"There isn't much going on in the market right now as investors are waiting for more companies to announce their first-quarter earnings results," which most likely benefited from the weakening of the yen, Ogawa said. Shares in Nikon Corp, the world's No 2 maker of professional digital cameras, advanced 1.4 percent to 3,550 yen. The company earns 75 percent of its total sales outside Japan.
Some market players are growing more cautious about Japan's upper house election on July 29 as Prime Minister Shinzo Abe's ruling party has been hit by scandals over the bungling of pension records and the resignation of the defence minister.
"There is caution ahead of the election, and that is holding some investors back. People are starting to speculate about the next prime minister." said Hiroaki Kuramochi, managing director at Bear Stearns. Toho Co became the biggest after a two-day rally of nearly 7 percent on speculation that data on Friday will show that the mobile phone operator posted strong subscriber growth in June.
Investors sold consumer lenders after the Nikkei business daily reported the industry was facing mounting requests from borrowers for reimbursement of overcharged interest on unsecured loans. Acom Co and Aiful Corp both dropped 4 percent, and Promise Co shed 2.4 percent.
Seven & I shares gained after Merrill Lynch raised its rating on the retailer to "buy" from "neutral" on Wednesday, citing expectations its earnings outlook would become clearer once it posted its first-quarter results after Thursday's close.