Asian Markets Update: Japanese Stocks Edge Higher Before Tankan Survey

TOKYO -- While the world waited for the Federal Open Market Committee meeting in the U.S. to start, Japanese investors continued to shift out of high-tech shares and into domestic cyclicals in cautious trading.

Still, the market was somewhat buoyant on hopes that the Bank of Japan's tankan survey on corporate investment, which will be released next Tuesday, will show an improvement in the economy.

The Nikkei 255 index rose 91.11 points to 17,370.17, while the Topix index, which includes all shares listed on the Tokyo Stock Exchange's first section, climbed 4.10 to 1578.44. The Jasdaq small-cap index gained 0.74 to 87.11, while the Nikkei over-the-counter index inched up 2.03 to 1751.81.

Domestic auto, paper and cement makers fared well, including Sumitomo Osaka Cement, up 30 yen, or 5.2%, to 605 ($5.74), Toyota Motor (TM), up 120, or 2.5%, to 4870, and Nippon Paper Industries, up 14, or 2.0%, to 718. Traders said that the likely buyers were domestic pension funds, many of which are highly risk-averse and hate to invest in international assets. Many investors are hoping cyclical shares will rise further after the BOJ tankan survey, which is expected to show a modest improvement in overall corporate sentiment.

Large-cap tech shares were mixed, with Sony (SNE) shedding 20 to 980, NEC (NIPNY) also losing 20 to 3350 and Advantest unchanged at 24,650. Japan Oracle jumped 1150, or 3.1%, to 38,750 after the firm said it expects a 25% boost in pretax profits for fiscal 2000, which ended March 31.

With talks of yet another sovereign debt downgrade, the greenback inched higher and recently bought 105.37 yen as the market entertained the possibility that Fitch IBCA could cut Japan's sovereign debt rating. Fitch confirmed that analysts in London would be meeting today to discuss Japan's rating, but said that this did not necessarily mean the rating would be slashed.

Hong Kong's Hang Seng index rose 282.65 points, or 1.8%, to 16,438.42 amid continued excitement in telecom shares. New World Development, which runs New World Telephone, fell HK$0.10, or 1.1%, to 9.20 ($1.18) despite talk that Singapore Telecommunications may buy a stake in the unit. Rival SmarTone shed 0.35, or 2.0%, to 17.40, while China Telecom (CHL), jumped 3.50, or 5.1%, to 72.25.

Clothing retailer Esprit Holdings was flat at 7.85 after the firm said it would postpone today's public offering of its European unit, Esprit Europe, due to unfavorable market conditions.

Elsewhere in Asia, Korea's Kospi index rose 8.86, or 1.1%, to 818.73, while Taiwan's TWSE index shed 58.54 to 8365.63.

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