Tokyo shares close higher, buoyed by Wall St's rally

Tokyo shares close higher, buoyed by Wall St's rally - UPDATE

	Published : Thu, 22 Mar 2007 08:02 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Share prices closed higher, with the benchmark Nikkei 225 Stock Average at its highest level in three weeks, investors having been encouraged by the rally on Wall Street overnight after the Federal Reserve raised hopes of a cut in interest rates in the months to come, dealers said.

The blue-chip Nikkei 225 closed 256.00 points or 1.49 pct higher at 17,419.20, off a high of 17,489.19.

The TOPIX index of all first-section issues advanced 23.51 points or 1.38 pct to 1,731.80, off a high of 1,739.59.

Gainers beat decliners 1,453 to 206, with 72 issues flat.

Volume rose to 2.16 bln shares from 1.90 bln Tuesday. The market was closed yesterday for a public holiday.

Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Securities, said: 'The Tokyo market mirrored sharp gains on the US stock markets on the back of the change in the Fed's stance on interest rates.'

He added: 'But the market had difficulty in rising further because there was selling near the 17,500-point level.'

Looking ahead, Fujito said: 'The possibility of lower interest rates in the US implies a decline in the economy. So the US markets will be closely watched tonight to see how they re-assess the Fed statement.'

Stocks of steel makers and non-ferrous metals companies were major gainers.

Nippon Steel was up 37 yen or 4.5 pct at 866, Sumitomo Metal Industries rose 16 yen or 2.8 pct to 592, Kobe Steel climbed 14 yen or 2.9 pct to 500 and JFE Holdings advanced 260 yen or 3.6 pct to 7,400.

Mitsubishi Materials was 15 yen or 2.7 pct higher at 574, Sumitomo Metal Mining rose 30 yen or 1.3 pct to 2,315 and Dowa Holdings was 52 yen or 4.3 pct higher at 1,249.

Among property shares, Mitsubishi Estate rose 50 yen or 1.3 pct to 3,830, Mitsui Fudosan was 40 yen or 1.2 pct higher at 3,400 and Nomura Real Estate was up 30 yen or 0.7 pct at 4,050.

Mazda Motor was up 23 yen or 3.61 pct at 660 after a newspaper reported that the company planned to increase domestic production by about 15 pct by the fiscal year ending March 2009 from the current level, dealers said.

Hitachi gained 26 yen or 3 pct at 879 after a newspaper reported that the firm had decided to shut down this year a Mexican plant making components for hard disk drives because of falling profitability there.

(1 usd = 117.40 yen)

kaori.kaneko@xfn.com

Tokyo shares close higher, buoyed by Wall St's rally - UPDATE