The Nikkei average rose 0.8 percent to close at its highest in over a week on Thursday as Fast Retailing Co jumped on news that its costly bid for retail chain Barneys New York may fail, while TDK Corp and other exporters gained on Wall Street and a softer yen.
Trading on the Tokyo Stock Exchange hit a record high in value terms, with 5.3 billion yen ($44.3 million) of stocks changing hands on the exchange's first section. The previous record was 5.1 trillion yen set in June. Markets participants said some hedge funds hit by US subprime mortgage woes squared positions and traded in large lots, pushing up the volume and turnover here.
Mizuho Financial Group Inc and Softbank Corp were among the most actively traded shares. "At least for now, concerns of a downward spiral have receded on the improving outlook for the US economy," said Akihito Yamanoi, general manager of the equity investment department at AIG Global Investment Corp's (Japan) investment management division.
"But we have to keep in mind that a credit squeeze isn't over yet." The Nikkei was up 141.32 points at 17,170.60, the highest close since July 31. The benchmark has lost 6.2 percent since it logged its highest for the year in February. The broader TOPIX index added 0.9 percent to 1,683.81. Daily trade volume swelled to 3.8 billion shares, the highest since November 2005. Advancing shares outnumbered decliners by 884 to 782.
Fast Retailing led the gains in the Nikkei, surging 10.5 percent to 7,190 yen, on news that Jones Apparel Group Inc agreed to sell its Barneys New York chain to rival suitor Istithmar for a sweetened bidding price.
After the closing bell, Fast Retailing said it would not submit a fresh bid for Barneys New York, cementing Dubai-based Istithmar's $942.3 million purchase of the luxury department store chain. Meanwhile, the dollar was quoted around 119.14 yen rebounding from a four-month low of 117.19 yen struck earlier in the week on electronic trading platform EBS.
Shares of electronics parts maker TDK jumped 5 percent to 9,840 yen, while Advantest Corp, the world's largest maker of microchip testers, rose 2 percent to 4,560 yen. Toyo's Kodama said bank shares such as Resona Holdings Inc also seem to have hit the bottom with investors grabbing profits for now, though concerns about the US subprime fallout still linger.
Resona was up 2 percent at 254,000 yen, while Mizuho, Japan's second-largest banking group, added 1 percent to 719,000 yen and third-ranked Sumitomo Mitsui Financial Group Inc leapt 3 percent to 1.03 million yen. Shippers fell, though, with Mitsui O.S.K. Lines Ltd losing 2.6 percent to 1,709 yen and Kawasaki Kisen Kaisha Ltd shedding 2.1 percent to 1,514 yen.
Hino Motors Ltd and Daihatsu Motor Co, both automakers majority-held by Toyota Motor Corp, were down 2.2 percent and 4.4 percent on what several market participants and analysts linked to possible position-squaring by a fund that may have gone bust.
Shares of Softbank added 1.8 percent to 2,600 yen after its quarterly profit rose 44.9 percent thanks to its new low-cost mobile phone service price plans. After the close, Japan Tobacco Inc, the world's third-largest cigarette maker, said it expects to post a 26 percent jump in annual profit due to the inclusion of earnings from its UK acquisition, the Gallaher Group.