Tokyo market floats up on New York gains

The Japanese stock market rose on Friday after US indices climbed to record highs overnight. But the advance of the Japanese market was limited by falls in the consumer finance and mobile telecommunications sectors.

The Nikkei 225 finished up 0.2 per cent at 18,157.93. The broader Topix rose 0.5 per cent to 1,776.17, largely reflecting the strong performance of steel stocks, which have a heavy weighting in the index.

The shares of heavy exporters gained after rallies took the US S&P 500 and Dow Jones Industrial Average to all-time highs. As a result, the Tokyo market’s electrical machinery sector rose 0.5 per cent. Matsushita Electric Industrial, which under the Panasonic brand is the world’s biggest consumer electronics maker, rose 1.5 per cent to Y2,385.

Steelmakers also continued to gain strongly from expectations that earnings results to be released later this month will show strong profit gains. Nippon Steel, Japan’s biggest steelmaker, climbed 3.9 per cent to Y955. Expectations were boosted by news that Japan’s crude steel output for the first half of the year hit a 33-year high.

Consumer finance companies dropped back sharply after rising steeply on Thursday on reports that Promise and Sanyo Shinpan were negotiating a merger. Promise dropped 6.6 per cent to Y3,540 and Sanyo Shinpan slid 2.2 per cent to Y3,520. Takefuji slumped 5.4 per cent to Y3,820.

The fall back in prices reflected analyst concerns about the sector’s continuing troubles, including huge pending interest repayments to borrowers following court rulings declaring them excessive.

Mobile phone carriers fell following Thursday’s decision by KDDI and Softbank to cut fees for phone users, suggesting the outbreak of a price war. KDDI dropped 6.1 per cent to Y853,000. Softbank moved down 2.7 per cent to Y2,665 and NTT DoCoMo slid 1.1 per cent to Y181,000.

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