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TOKYO -- Tuesday's uproar in the banking sector over a possible new corporate tax plan dwindled to a mere mumble today, as most players were more concerned with seeing the benchmark

Nikkei 225

index settle above key resistance of 20,000.

Players got their wish. The Nikkei rose 138.89 to 20,007.77, the first time the index has closed above 20,000 in almost two-and-a-half years. The


index, comprising shares listed on the

Tokyo Stock Exchange's

first section, climbed 10.28 to 1747.83. The


small-cap index jumped 2.45, or 2.3%, to 111.27, while the Nikkei


shares rose 37.87, or 1.6%, to 2417.27.

"With the Nikkei 225 cash index nestled above 20,000 now, I'm expecting the market to head higher on more of a technical basis, rather than on news," said one futures desk head at a major U.S. brokerage firm. The player said Nikkei 225 futures, which settled at 19,990, can now shoot for an upside target of 20,400.

Plans by the Tokyo metropolitan government to slap a 3% tax on gross profits of major banks met with heavy criticism by the banking industry and the government, but investors were calm over the news the day after. Most bank shares were only marginally lower, with the

Industrial Bank of Japan

closing down 1.9%.

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However, some analysts say when the proposal becomes law, bank shares could get hit.

"Investors do not appear to be taking a positive view on bank prospects for the year 2000 and seem increasingly concerned about the ability of banks to generate profits. They are therefore likely to react negatively to any news that threatens nearly one-third of net profits," said James Fiorillo, bank analyst at

ING Barings


Meanwhile, shares of securities firms fared well. Domestic brokers are expected to cull major profits as long as the stock market stays afloat and interest in their new mutual funds continues.

Nomura Securities

jumped 270, or 8.8%, to 2250, while

Daiwa Securities

climbed 164, or 8.4%, to 2110.

Game makers are attracting both retail and fund interest, with


up 2000, or 10.2%, to 21,700 and


up 760, or 9.7%, to 8600. Large tech shares also gained momentum, with



rising 450, or 1.5%, to 29,600, while



climbed 140, or 6.0%, to 2465.


, a struggling trading company, saw shares get pummeled as the firm unveiled a restructuring plan late Tuesday that investors didn't like. Tomen shares fell 50, or 47.2%, to 56, after the company said it would liquidate 123 of its loss-generating group companies, cut staff and ask five creditor banks to forgo loans totaling around 200 billion yen.

The greenback hovered around 108.90 but the return of yen-carry trades has dollar bulls seeking a new target for the greenback at 112.00 yen. With central banks nudging EU rates higher last week, many hedge funds are apparently now borrowing at low yen rates to invest in higher yielding securities in the U.S. and Europe.

Hong Kong's

Hang Seng

index closed up 590.73, or 3.6%, to 16,819.46, thanks to continued enthusiasm over

China Telecom

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. Investors hope the firm, which makes up about 21% of the Hang Seng index, will be included in

Morgan Stanley Capital International's China Free

index, a broad market gauge fund managers use to assess global assets. China Telecom shares closed up 4.25, or 7.1%, at 64.25.

Hutchison Whampoa

also contributed, with shares climbing 10.500, or 8.5%, to 127.500. The firm announced plans to sell its 10.1% stake in



Vodafone Airtouch

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Straits Times

index fell 18.48 to 2227.32, while Korea's


index rose 14.83, or 1.5%, to 976.05. The Korean government said it was giving consideration to allowing foreign companies to list on the Korean Stock Exchange in the latter half of 2000.