Japan's Nikkei average clung to small gains by the close on Thursday after a roller-coaster ride that saw the market's greatest activity in 14 years.
It rose over three percent to a 10-month high before falls in bank shares pulled it back.
Shares in banks fell in the afternoon as a tumble in Japanese government bond (JGB) prices stoked concerns about banks' massive bond holdings. Analysts said the falls came at a time when the overall market needed a breather after its recent swift rally.
"The market has apparently overshot," said Shigeru Saito, general manager at Daiwa Asset Management's research department.
The Nikkei rose for the third session to close up 0.34 percent at 9,624.80. The capital-weighted TOPIX index was up 0.76 percent at 952.44.
Trading volume hit its highest level since February 23, 1989, at 2.12 billion shares.
The Nikkei rose at one point to 9,896.64, its highest level since August 28, with heavy buying by foreign investors and proprietary dealers helping to fuel the gains.
Its high represented a nine percent rise since an unexpectedly strong improvement in the Bank of Japan's quarterly "tankan" corporate sentiment survey caught bears off guard on Tuesday.
"The market is now dominated by short-term players," said Terushi Hirotama, head of trading at Ichiyoshi Securities.
"They tested the upside following a higher Wall Street, and now that the gains have fallen short of their target levels, they're selling so as to limit losses," he said.
Traders said strong resistance had been seen at the 9,842 level, which the Nikkei passed briefly in the morning but could not hold. That level represents a halfway recovery from the 11-month downturn to late April.
The market capitalization of the main board has regained 52 trillion yen ($440 billion) since April 28, when the Nikkei hit a two-decade low.
Several investors and analysts said the Nikkei was likely to stay at around 9,500 for the time being.
"A rise in the Nikkei toward 10,000 would not be warranted given current economic fundamentals, but I think it was reasonable to expect its return to the level last summer -- between 9,300 and 9,500 -- before fears over banks' health dampened the market," Saito said.
Naoki Kamiyama, a strategist at Morgan Stanley, said buying by domestic fund managers who had reduced their weighting of Japanese shares in the April-June quarter was expected to underpin the Nikkei at around 9,500 for the time being.
"But remember that Tokyo is merely a market mirroring ups and downs on Wall Street. Without help from upbeat earnings in the U.S. from next week onwards, I don't think the Nikkei will break through well above 10,000," he said.
RESONA, SONY RECOVER
Renewed optimism about the economy following the tankan survey together with heated activity kept luring investors to large-cap issues, including Sony Corp, whose growth prospects investors had previously been wary about.
Consumer electronics giant Sony was up 2.2 percent at 3,720 yen, finally erasing the 1,000 yen plunge that followed its shock announcement on quarterly earnings in late April.
Rival Matsushita Electric Industrial Co Ltd was up 6.75 percent at 1,345 yen, helped by upbeat April-June earnings results by its building materials and lighting gear affiliate Matsushita Electric Works Ltd
Resona Holdings Inc, the nation's fifth-ranked banking group, which received public funds last month, was up one yen at 96 yen.
Earlier in the day, Resona rose above 100 yen for the first time since September 19.
But Mizuho Financial Group and other major banks wiped out morning gains as falls in JGB prices following a weak auction raised concerns about banks.
Mizuho, the world's largest bank by assets, slumped 7.38 percent to 113,000 yen.
In value terms, a total 1.71 trillion yen worth of shares were traded, marking the third straight session with more than one trillion yen worth of shares changing hands.
The Tokyo market last saw such hectic activity in 1989, toward the end of the nation's asset bubble.
After the market closed, the Tokyo bourse said its data feed system connected to member brokers and information vendors suffered delays on Thursday morning due to unusually high communication volume. ($1=118.20 Yen) ((Xtra clients: Click on http://topnews.session.rservices.com to see Top News pages in multimedia Web format. If you can't access this page, ask your IT department to check your Internet firewall settings. To see the technical advisory, click on
It rose over three percent to a 10-month high before falls in bank shares pulled it back.
Shares in banks fell in the afternoon as a tumble in Japanese government bond (JGB) prices stoked concerns about banks' massive bond holdings. Analysts said the falls came at a time when the overall market needed a breather after its recent swift rally.
"The market has apparently overshot," said Shigeru Saito, general manager at Daiwa Asset Management's research department.
The Nikkei rose for the third session to close up 0.34 percent at 9,624.80. The capital-weighted TOPIX index was up 0.76 percent at 952.44.
Trading volume hit its highest level since February 23, 1989, at 2.12 billion shares.
The Nikkei rose at one point to 9,896.64, its highest level since August 28, with heavy buying by foreign investors and proprietary dealers helping to fuel the gains.
Its high represented a nine percent rise since an unexpectedly strong improvement in the Bank of Japan's quarterly "tankan" corporate sentiment survey caught bears off guard on Tuesday.
"The market is now dominated by short-term players," said Terushi Hirotama, head of trading at Ichiyoshi Securities.
"They tested the upside following a higher Wall Street, and now that the gains have fallen short of their target levels, they're selling so as to limit losses," he said.
Traders said strong resistance had been seen at the 9,842 level, which the Nikkei passed briefly in the morning but could not hold. That level represents a halfway recovery from the 11-month downturn to late April.
The market capitalization of the main board has regained 52 trillion yen ($440 billion) since April 28, when the Nikkei hit a two-decade low.
Several investors and analysts said the Nikkei was likely to stay at around 9,500 for the time being.
"A rise in the Nikkei toward 10,000 would not be warranted given current economic fundamentals, but I think it was reasonable to expect its return to the level last summer -- between 9,300 and 9,500 -- before fears over banks' health dampened the market," Saito said.
Naoki Kamiyama, a strategist at Morgan Stanley, said buying by domestic fund managers who had reduced their weighting of Japanese shares in the April-June quarter was expected to underpin the Nikkei at around 9,500 for the time being.
"But remember that Tokyo is merely a market mirroring ups and downs on Wall Street. Without help from upbeat earnings in the U.S. from next week onwards, I don't think the Nikkei will break through well above 10,000," he said.
RESONA, SONY RECOVER
Renewed optimism about the economy following the tankan survey together with heated activity kept luring investors to large-cap issues, including Sony Corp, whose growth prospects investors had previously been wary about.
Consumer electronics giant Sony was up 2.2 percent at 3,720 yen, finally erasing the 1,000 yen plunge that followed its shock announcement on quarterly earnings in late April.
Rival Matsushita Electric Industrial Co Ltd was up 6.75 percent at 1,345 yen, helped by upbeat April-June earnings results by its building materials and lighting gear affiliate Matsushita Electric Works Ltd
Resona Holdings Inc, the nation's fifth-ranked banking group, which received public funds last month, was up one yen at 96 yen.
Earlier in the day, Resona rose above 100 yen for the first time since September 19.
But Mizuho Financial Group and other major banks wiped out morning gains as falls in JGB prices following a weak auction raised concerns about banks.
Mizuho, the world's largest bank by assets, slumped 7.38 percent to 113,000 yen.
In value terms, a total 1.71 trillion yen worth of shares were traded, marking the third straight session with more than one trillion yen worth of shares changing hands.
The Tokyo market last saw such hectic activity in 1989, toward the end of the nation's asset bubble.
After the market closed, the Tokyo bourse said its data feed system connected to member brokers and information vendors suffered delays on Thursday morning due to unusually high communication volume. ($1=118.20 Yen) ((Xtra clients: Click on http://topnews.session.rservices.com to see Top News pages in multimedia Web format. If you can't access this page, ask your IT department to check your Internet firewall settings. To see the technical advisory, click on
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