Asian Markets Update: Japanese Stocks Shrug Off Obuchi News

TOKYO -- Monday brought drama of several kinds to the markets in Tokyo, encompassing a sick Prime Minister, improving business sentiment and a plunging currency. Things could get even more volatile Tuesday.

Stocks were pulled in various directions as the

Bank of Japan

reportedly intervened to weaken the yen after its surge on Friday and as reports filtered into the market of a stroke suffered Sunday by

Prime Minister Keizo Obuchi

. News of Obuchi's illness did not move the market much today, but it may affect equities tomorrow as late-breaking news says he is currently in a coma.

The

Nikkei 225

stock index climbed 389.67 points, or 1.9%, to 20,726.99, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, rose 26.51, or 1.6%, to 1732.45. The

Jasdaq

small-cap index fell 5.42, or 5.0%, to 103.54, while the Nikkei

over-the-counter

shares lost 52.67, or 2.3%, to 2214.54.

News of Obuchi's stroke hit the papers over the weekend, saying the premier had become exhausted after meeting with senior officials of the

Liberal

and

New Komei

parties, both coalition partners in his ruling

Liberal Democratic Party

government. Only after the market closed today did a report surface that Obuchi was in a coma, a development some analysts believe will hurt the market tomorrow.

Monday's trading was dominated by what investors took to be positive news: the BOJ's

tankan

survey of corporate sentiment, which showed a more upbeat feeling toward corporate and economic conditions by planning managers around the country. The "diffusion index" for large manufacturers was -9, in line with market expectations, and a marked improvement from the -17 logged in the previous survey last quarter.

The BOJ, under instructions from the

Ministry of Finance

, reportedly intervened today to weaken the yen, which surged from around 102-105 to the dollar on Friday. A high yen makes Japanese exports more expensive overseas. The greenback fell to around 105.11 yen before trading migrated from Tokyo to London.

Dealers at domestic securities firms were shedding tech shares and favoring blue-chips.

Sumitomo Bank

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rose 97 yen, or 6.3%, to 1627,

Sanwa Bank

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climbed 41, or 3.8%, to 1109, while

Hitachi

(HIT)

gained 65, or 5.3%, to 1284. Tech shares took a major beating.

Yahoo! Japan

slipped 7 million, or 11.2%, to 55.3 million while

Trend Micro

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tumbled 1900, or 10.6%, to 16,100.

Sony

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rose 500, or 3.5%, to 15,000 after

Warburg Dillon Read

raised its rating on the company from buy to strong buy.

Hong Kong's

Hang Seng

index fell below what some in the market think is an important psychological level, 17,000. It closed down 513.61 points, or 3.0%, to 16,892.93. With Japanese tech shares getting pummeled, many of Hong Kong's high flying tech shares issues fell right along, with

Tom.com

slipping HK$1.80, or 16.7%, to 9.00.

The market was also negative on news that

HSBC

(HBC)

, the world's second largest bank, was buying France's

Credit Commercial de France

for $10.7 billion. HSBC is offering to pay more than three times book value for CCF, far more than a competing bid by CCF's 19% owner, Dutch bank

ING

. HSBC closed down HK$3.50, or 3.9%, to 87.50.