Japanese stocks rose in active trade for the fifth session in a row on Monday as buying by foreigners helped to boost highly liquid large-cap issues such as Nippon Steel 5401.T .
But Sony 6758.T and several high-tech exporters came under pressure after falls by their U.S. peers and ahead of a key rate decision by the U.S. Federal Reserve later in the week, putting a lid on the key Nikkei average .N225 .
The Nikkei finished up a meagre 0.18 percent at 9,137.14, its highest close since December 3. It was the first five-day winning run since one that ended on June 3.
The broader TOPIX index .TOPX rose 0.62 percent to 904.32, its highest close since September 30.
"While blue-chip exporters are taking a breather, investors are expanding their target to some other issues, large-cap issues dependent on domestic demand in particular," said a senior manager at a foreign brokerage.
"I think it's a reasonable pickup cycle."
Sony Corp, the world's biggest consumer electronics maker, fell 1.99 percent at 3,450 yen after the U.S. tech-dominated Nasdaq .IXIC slipped on Friday, dragged down by weakness in networking and semiconductor shares.
Electronics parts maker Kyocera Corp 6971.T was down 1.82 percent at 7,010 yen.
But the world's second-largest steelmaker, Nippon Steel Corp, the most active issue by volume, rose 3.92 percent to 159 yen, while rival JFE Holdings Inc 5411.T rose 4.32 percent to 1,763 yen after earlier marking a lifetime high of 1,785 yen.
Japan's steelmakers made a return to profit in the year ended in March, and have forecast an even stronger performance this business year on the back of restructuring, price rises and solid demand from China and other Asian markets.
Another active issue, heavy machinery giant Mitsubishi Heavy Industries Ltd 7011.T , was up 1.66 percent at 306 yen, adding to Friday's 5.61 percent rally.
LIQUID ISSUES
Domestic investors mostly saw Tokyo's recent rally as a chance to sell their loss-making stock portfolios. So the main driving force behind it has been buying by foreigners.
The prospect of more cuts in global interest rates and firmness in U.S. capital markets has encouraged international investors to move into riskier assets, including Japanese stocks, which are laggards globally.
Some analysts said their buying of steel and heavy machinery issues in the past few sessions could suggest they merely seek stocks which are easy to sell even if overseas markets enter a correction after the Fed's decision.
Unlike these issues, high techs, for example, are less easy to sell given the smaller number of their outstanding shares.
"Everyone keeps talking about the U.S. Fed meeting, and that's obviously a very key event going forward, but also crucial is the question of whether foreigners are going to keep buying, and if so what they are going to be buying," said Masayoshi Yano, senior manager of investment information at Tokai Tokyo Securities.
Banks were also firmer, continuing a catchup rally since their steep falls until late April.
Receding fears of a financial crisis have reversed a downtrend for the sector that began last October, when reformist Heizo Takenaka became the top banking regulator and introduced a stricter assessment of banks' problem loans and their capital.
The TOPIX index of all first-section issues returned to the level when Takenaka came to office, but the banking sector subindex .IBSNK.T was still 30 percent below its level then.
Industry leader Mizuho Financial Group 8411.T was up 4.08 percent at 97,000 yen and Mitsubishi Tokyo Financial Group 8306.T , seen as the healthiest of Japan's four megabanks, was up 3.24 percent at 542,000 yen.
"Even if Tokyo corrects the current somewhat overheating rally, I think we can still buy lagging bank shares," said Masaharu Sakudo, an adviser at Tachibana Securities.
Volume rose to its highest level in more than a week, with 1.59 billion shares changing hands on the first section.
It was the 18th straight session with over one billion shares traded, the longest such streak since a 20-day spree ended in March 1989, near the end of Japan's asset bubble.
The continued heavy volume provided a boost to brokerages, with second-ranked broker Daiwa Securities Group 8601.T 3.64 percent higher at 684 yen.
But Sony 6758.T and several high-tech exporters came under pressure after falls by their U.S. peers and ahead of a key rate decision by the U.S. Federal Reserve later in the week, putting a lid on the key Nikkei average .N225 .
The Nikkei finished up a meagre 0.18 percent at 9,137.14, its highest close since December 3. It was the first five-day winning run since one that ended on June 3.
The broader TOPIX index .TOPX rose 0.62 percent to 904.32, its highest close since September 30.
"While blue-chip exporters are taking a breather, investors are expanding their target to some other issues, large-cap issues dependent on domestic demand in particular," said a senior manager at a foreign brokerage.
"I think it's a reasonable pickup cycle."
Sony Corp, the world's biggest consumer electronics maker, fell 1.99 percent at 3,450 yen after the U.S. tech-dominated Nasdaq .IXIC slipped on Friday, dragged down by weakness in networking and semiconductor shares.
Electronics parts maker Kyocera Corp 6971.T was down 1.82 percent at 7,010 yen.
But the world's second-largest steelmaker, Nippon Steel Corp, the most active issue by volume, rose 3.92 percent to 159 yen, while rival JFE Holdings Inc 5411.T rose 4.32 percent to 1,763 yen after earlier marking a lifetime high of 1,785 yen.
Japan's steelmakers made a return to profit in the year ended in March, and have forecast an even stronger performance this business year on the back of restructuring, price rises and solid demand from China and other Asian markets.
Another active issue, heavy machinery giant Mitsubishi Heavy Industries Ltd 7011.T , was up 1.66 percent at 306 yen, adding to Friday's 5.61 percent rally.
LIQUID ISSUES
Domestic investors mostly saw Tokyo's recent rally as a chance to sell their loss-making stock portfolios. So the main driving force behind it has been buying by foreigners.
The prospect of more cuts in global interest rates and firmness in U.S. capital markets has encouraged international investors to move into riskier assets, including Japanese stocks, which are laggards globally.
Some analysts said their buying of steel and heavy machinery issues in the past few sessions could suggest they merely seek stocks which are easy to sell even if overseas markets enter a correction after the Fed's decision.
Unlike these issues, high techs, for example, are less easy to sell given the smaller number of their outstanding shares.
"Everyone keeps talking about the U.S. Fed meeting, and that's obviously a very key event going forward, but also crucial is the question of whether foreigners are going to keep buying, and if so what they are going to be buying," said Masayoshi Yano, senior manager of investment information at Tokai Tokyo Securities.
Banks were also firmer, continuing a catchup rally since their steep falls until late April.
Receding fears of a financial crisis have reversed a downtrend for the sector that began last October, when reformist Heizo Takenaka became the top banking regulator and introduced a stricter assessment of banks' problem loans and their capital.
The TOPIX index of all first-section issues returned to the level when Takenaka came to office, but the banking sector subindex .IBSNK.T was still 30 percent below its level then.
Industry leader Mizuho Financial Group 8411.T was up 4.08 percent at 97,000 yen and Mitsubishi Tokyo Financial Group 8306.T , seen as the healthiest of Japan's four megabanks, was up 3.24 percent at 542,000 yen.
"Even if Tokyo corrects the current somewhat overheating rally, I think we can still buy lagging bank shares," said Masaharu Sakudo, an adviser at Tachibana Securities.
Volume rose to its highest level in more than a week, with 1.59 billion shares changing hands on the first section.
It was the 18th straight session with over one billion shares traded, the longest such streak since a 20-day spree ended in March 1989, near the end of Japan's asset bubble.
The continued heavy volume provided a boost to brokerages, with second-ranked broker Daiwa Securities Group 8601.T 3.64 percent higher at 684 yen.
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