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2ND LD: Nikkei renews 4 yr, 3 month high on expectation of end to deflation.

TOKYO, Sept. 21 Kyodo

(EDS: ADDING INFO)

The key Nikkei stock index continued its upswing Wednesday to close at a fresh four year, three month high with record high trading volume, boosted by growing expectations that Japan may soon be pulling out of deflation.

The 225-issue Nikkei Stock Average rose 48.00 points, or 0.37 percent, to 13,196.57, its highest finish since June 11, 2001. On Tuesday, the index ended above 13,000 for the first time since June 22, 2001.

The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange rose 5.18 points, or 0.38 percent, to 1,357.71, a level unseen since May 25, 2001.

Trading volume on the TSE's main section hit a record high for the second consecutive day, as investors' bullish sentiment overcame active selling aimed at locking in profits from the recent rapid rise, brokers said.

Turnover totaled a record 3,698.98 million shares, surpassing the previous record of 3,261.31 million shares set Tuesday.

''Although the market may look like it is overheating, it has gained enough trading energy to overcome such concerns,'' said Hiroichi Nishi, equities chief at Nikko Cordial Securities Inc.

Market sentiment was brightened as the Land, Infrastructure and Transport Ministry said Tuesday land prices in Tokyo rose for the first time since 1990, brokers said.

''The land price data raised market expectations that Japan is overcoming asset deflation,'' Tsuyoshi Segawa, equity strategist at Shinko Securities Co., said.

Investors shrugged off an overnight fall in U.S. shares as the market focus shifted to ''domestic factors,'' such as signs showing improvement of the Japanese economy, Segawa said.

The market's continued rise was supported by solid gains in financial issues such as those of banks, and insurance and brokerage firms.

Mizuho Financial Group was the most heavily traded issue by value, up 1,000 yen to 673,000 yen.

Among other major financial groups, Mitsubishi Tokyo Financial Group rose 20,000 yen to 1,240,000 yen and Sumitomo Mitsui Financial Group gained 20,000 yen to 1,030,000 yen on heavy volume.

The other notable gainers were warehousing, pharmaceutical and land transportation issues. In contrast, major decliners were paper and pulp, glass, and construction issues.

Mitsubishi Motors was the day's volume leader. It fell 9 yen to 230 yen, ending its eight consecutive winning sessions.

Declining issues outnumbered advancers 867 to 693, with 100 shares ending flat.

Mitsubishi Materials climbed 5 yen to 386 yen, rising for the eighth straight trading day.

Brokers said the market welcomed the company's announcement Tuesday that it has raised its group pretax profit estimate for the April-September first half of fiscal 2005 to 32 billion yen from its initial estimate of 22 billion yen.

Nihon Matai, a maker of plastic and paper food containers, declined 13 yen to 285 yen one day after announcing downward revisions to its earnings estimates for the first half of its 2005 business year.

The company now expects 100 million yen in group net profit for the March-August period, down from the 160 million yen it projected in April.

Foreign brokerage buy orders placed before the opening exceeded sell orders by a large volume and for the fourth straight trading day, also helping lift market sentiment, brokers said.

The TSE's Second Section index lost 22.02 points, or 0.54 percent, to 4,051.12 on a volume of 248.81 million shares. In Osaka, the near-term December Nikkei 225 index futures contract rose 30 points to 13,160.

On the Jasdaq Securities Exchange, takeout sushi chain operator Kyotaru ended the day at 191,000 in a strong debut compared with its initial public offering of 120,000 yen.

The Tokyo-based company was delisted from the TSE's First Section in 1997 after filing for court protection from creditors under the Corporate Rehabilitation Law that year.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Sep 26, 2005
Words:650
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