TOKYO -- In a strange turn of events, Japanese shares closed higher amid
Moody's Investors Services
slashed Japan's sovereign debt rating for the second time in two years.
Investors largely ignored Moody's action today, which cut Japan's rating to AA2 from AA1, and instead scooped up large-cap electronic shares ahead of the fiscal first-half earnings season.
index gained 201.09, or 1.2%, to close at 16,501.55, while the
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, climbed 23.59, or 1.6%, to end at 1509.88. The
small-cap index rose 0.54 to stand at 80.69, while the Nikkei
market climbed 8.32 to finish at 1700.81.
Moody's said it cut Japan's rating because of the government's lavish spending program aimed at boosting the economy. Over the last decade, the program has had little effect.
"The maintenance of the negative outlook is prompted by policy shortcomings and structural problems that have resulted in a level of government indebtedness that has become the highest, relative to gross domestic product, among the advanced industrial economies," Moody's said in a statement.
That said, the market paid no attention, in part because Moody's had been warning it would cut Japan's rating for some time. In addition, there were bulk buy orders for electronic shares from local fund managers and institutional investors that wanted to take advantage of a week-long decline in share prices, traders added.
Tech shares were hot, with
rising 340 yen, or 3.0%, to 11,680 ($110.78),
gaining 250, or 6.0%, to 4400 and
, climbing 210, or 6.5%, to 3460.
Bank shares were mostly lower, however, as investors continued to unwind cross-shareholdings.
dropped 21, or 2.7%, to 755, while the
Bank of Tokyo Mitsubishi
slid 12 to 1319.
In initial public offerings, online broker
didn't fare so well, as the high IPO price of 1.5 million yen deterred investor appetite. Shares closed at 1.4 million.
With the euro struggling to gain ground, most currency dealers were busy adjusting positions in euro/dollar positions and ignored the news from Moody's. The greenback fell against the yen recently to fetch 105.43.
Traders and investors looked like they took the day off in Hong Kong, with the key
index falling 156.50 to close at 17,275.45 amid extremely thin trading. Most index heavyweights barely budged, including
, down HK$0.50 to 61.25 ($7.85) and
, which was flat at 113.50.
was also flat at 18.45 a day after announcing fiscal first-half net profits declined 37% from the same time last year to CY171 million. Despite the fall in profits, many experts reckon the firm can rebound as mobile-phone services increase the firm's revenue over the next several years.
Elsewhere in Asia, Korea's
index lost 2.69 to close at 653.68 and Taiwan's
index slipped 62.94 to stand at 7367.99.