Japan's TOPIX stock index rose to a fresh 21-month high on Tuesday as investors shrugged off weaker-than-expected machinery orders data and bought shares in big banks such as Mizuho Financial Group Inc.
Traders said foreign investors were snapping up shares in Japanese banks, which are seen benefiting from Japan's economic recovery and are slowly but steadily whittling away at their mountain of bad loans.
The TOPIX index of all first-section issues gained 0.20 percent to close at 1,134.34 -- its highest level since May 24, 2002.
The benchmark Nikkei average ended up 0.25 percent at 11,532.04.
Government data released late in the afternoon showed Japan's core private-sector machinery orders, a key gauge of trends in capital spending, fell 12.2 percent in January from a month earlier on a seasonally adjusted basis -- well below the median consensus of a one percent fall.
With most analysts viewing the data as a spring back from very strong figures in December, the market's reaction was limited.
"The general economic background is still that exports are rising, corporate profits are picking up and investment improving. This looks like a one-off decline," said Mamoru Yamazaki, chief economist at Barclays Capital.
Traders also said that the market was focused more on the next key piece of economic data, the Bank of Japan's quarterly survey of corporate sentiment, which is due on April 1 and is expected to provide further proof of a solid economic recovery.
"Market sentiment is so strong now that many feel they have little choice but to buy, and that's especially true of bank shares, which still look undervalued," said Ken Masuda, a senior dealer at Shinko Securities.
Mizuho, Japan's biggest financial group, put on 4.02 percent to 388,000 yen, while second-ranked Sumitomo Mitsui Financial Group Inc rose 2.15 percent to 665,000 yen.
Gainers outnumbered decliners 783 to 617. Volume declined, with 1.51 billion shares changing hands on the first section, down from Monday's 1.89 billion.
Electronics conglomerate NEC Corp slipped 1.98 percent to 841 yen, leading a broad decline in tech shares on a halt in the dollar's advance against the yen and following a 1.9 percent slide in the tech-heavy Nasdaq
Advantest Corp, Japan's biggest maker of chip testing equipment, slid 2.09 percent to 8,450 yen.
The dollar was fetching 111.25 yen in Tokyo, which compares with a five-month high of 112.34 yen hit in London on Monday.
Some market players said the decline in Japanese tech shares was no more than a short-term correction triggered by falls on Wall Street.
"The biggest worry for investors has been the level of the yen, and after the dollar's fall to as low as 105 we now seem to be stabilizing around 111 -- that has to be a good thing for tech exporters," said Koji Muneoka, head of domestic sales trading at HSBC Securities. Sanrio Co. Ltd., the maker of "Hello Kitty" brand goods, extended its winning streak to five sessions with a soaring 14.03 percent gain to 1,626 yen,
The company's shares have more than doubled this year to date, helped by strong sales of the company's character goods, but some traders were worrying if the rise was grounded in fundamentals.
"You'd have to be brave to buy at this level. Individual investors are still piling into the stock through net brokerages but it's a bit like trying to climb past the peak of Mount Fuji and right up into the stratosphere," said Shinko's Masuda.
Traders said foreign investors were snapping up shares in Japanese banks, which are seen benefiting from Japan's economic recovery and are slowly but steadily whittling away at their mountain of bad loans.
The TOPIX index of all first-section issues gained 0.20 percent to close at 1,134.34 -- its highest level since May 24, 2002.
The benchmark Nikkei average ended up 0.25 percent at 11,532.04.
Government data released late in the afternoon showed Japan's core private-sector machinery orders, a key gauge of trends in capital spending, fell 12.2 percent in January from a month earlier on a seasonally adjusted basis -- well below the median consensus of a one percent fall.
With most analysts viewing the data as a spring back from very strong figures in December, the market's reaction was limited.
"The general economic background is still that exports are rising, corporate profits are picking up and investment improving. This looks like a one-off decline," said Mamoru Yamazaki, chief economist at Barclays Capital.
Traders also said that the market was focused more on the next key piece of economic data, the Bank of Japan's quarterly survey of corporate sentiment, which is due on April 1 and is expected to provide further proof of a solid economic recovery.
"Market sentiment is so strong now that many feel they have little choice but to buy, and that's especially true of bank shares, which still look undervalued," said Ken Masuda, a senior dealer at Shinko Securities.
Mizuho, Japan's biggest financial group, put on 4.02 percent to 388,000 yen, while second-ranked Sumitomo Mitsui Financial Group Inc rose 2.15 percent to 665,000 yen.
Gainers outnumbered decliners 783 to 617. Volume declined, with 1.51 billion shares changing hands on the first section, down from Monday's 1.89 billion.
Electronics conglomerate NEC Corp slipped 1.98 percent to 841 yen, leading a broad decline in tech shares on a halt in the dollar's advance against the yen and following a 1.9 percent slide in the tech-heavy Nasdaq
Advantest Corp, Japan's biggest maker of chip testing equipment, slid 2.09 percent to 8,450 yen.
The dollar was fetching 111.25 yen in Tokyo, which compares with a five-month high of 112.34 yen hit in London on Monday.
Some market players said the decline in Japanese tech shares was no more than a short-term correction triggered by falls on Wall Street.
"The biggest worry for investors has been the level of the yen, and after the dollar's fall to as low as 105 we now seem to be stabilizing around 111 -- that has to be a good thing for tech exporters," said Koji Muneoka, head of domestic sales trading at HSBC Securities. Sanrio Co. Ltd., the maker of "Hello Kitty" brand goods, extended its winning streak to five sessions with a soaring 14.03 percent gain to 1,626 yen,
The company's shares have more than doubled this year to date, helped by strong sales of the company's character goods, but some traders were worrying if the rise was grounded in fundamentals.
"You'd have to be brave to buy at this level. Individual investors are still piling into the stock through net brokerages but it's a bit like trying to climb past the peak of Mount Fuji and right up into the stratosphere," said Shinko's Masuda.
3287.99
1275.09
