Tokyo shares close broadly higher as worry about carry trades eases

Tokyo shares close broadly higher as worry about carry trades eases - UPDATE

	Published : Thu, 08 Mar 2007 08:51 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Share prices recovered from their early losses to close broadly higher as the yen's steep decline encouraged conjecture in the market that the unwinding of yen carry trades may have run out of steam, dealers said.

Relieved that the unwinding of carry trades -- in which money is borrowed here at low interest rates and invested in higher-yielding assets abroad -- may no longer drive up the yen, investors snapped up shares, sending the Nikkei 225 Stock Average above 17,000 points for the first time in four sessions.

The Nikkei closed 325.69 points or 1.94 pct higher at 17,090.31, its high for the day.

The TOPIX index of all first-section issues gained 31.36 points or 1.86 pct to settle at its own high for the day of 1,720.96.

Gainers beat decliners 1,519 to 165, with 46 issues flat.

Volume dipped to 2.57 bln shares from 3.0 bln yesterday.

Tatsuo Kurokawa, a strategist at Japan Asia Securities, said: 'Aggressive short-covering on the Nikkei futures emerged on the back of the yen's fall, and this prompted a greater variety of investors to rush to buy, across all sectors.'

The gains were not limited to the shares of exporting companies, which benefit from a weaker yen. Fishery, agriculture, forestry, oil, steel and utilities issues were among the leading gainers.

Among fishery companies, Nippon Suisan Kaisha rallied by 55 yen or 7.8 pct to 760 and Maruha rose 8 yen or 3.38 pct to 245.

Nippon Oil advanced 33 yen or 3.84 pct to 892 and Cosmo Oil edged up 13 yen or 2.74 pct to 487.

Nippon Steel climbed 38 yen or 4.45 pct to 891 and Kobe Steel soared by 26 yen or 5.45 pct to 503.

Tokyo Electric Power finished 110 yen or 2.72 pct higher at 4,150 and Chubu Electric Power surged 200 yen or 5.05 pct to 4,160.

Among exporters, Toyota Motor rose 100 yen or 1.29 pct to 7,840 and Honda Motor gained 100 yen or 2.37 pct at 4,320.

Tokyo Electron finished 220 yen or 2.69 pct higher at 8,400 after a newspaper reported that the company would spend 20-30 bln yen on building a plant for making equipment for manufacturing next-generation chips, dealers said.

Sony rose 170 yen or 2.92 pct to 5,990 and Hitachi gained 24 yen or 3.02 pct at 818.

Daiei closed 96 yen or 6.66 pct higher at 1,538 after a newspaper reported that Aeon had agreed to take a 15 pct stake in the supermarket chain, dealers said. The companies said they had not reached any agreement. Aeon stock dropped 5 yen or 0.22 pct to 2,295. .

Nikko Cordial rose 11 yen or 0.81 pct to 1,368, above the price of 1,350 yen per share that Citigroup has offered for a majority stake in the brokerage house, as speculative investors chased the stock higher, dealers said.

(1 usd = 116.69 yen)

yumiko.nishitani@xfn.com

Tokyo shares close broadly higher as worry about carry trades eases - UPDATE