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TOKYO -- Some say today's rise in Tokyo stocks looked like it was the calm before the storm. Others were quite optimistic, and said the market can finally rally after three dismal months.

The

Bank of Japan

raised short-term interest rates by 25 basis points, to around 0.28% today, after the market closed. This ends the bank's longstanding zero-interest policy.

The

Nikkei 225

index rose 141.85, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, climbed 0.96 to 1490.89. The

Jasdaq

small-cap index fell 0.20 to 81.16, while the Nikkei over-the-counter index gained 2.74 to 1665.51.

The BOJ's policy board meeting came at a bad time when many investors and traders are out on their summer holidays and before obon, which starts this weekend. Many Tokyo-ites rush out of the city to go home to spend time with family and pay their respect to the dead.

That said, a rally in Nikkei 225 futures materialized toward the end of the session, putting a positive tone on the cash market that has slipped nearly 15% over the past three months.

"This is the first time in about a month where I've seen investors actually buying new positions in futures," said one trader at an U.S. house here. "Which is surprising since many of us were short just yesterday."

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Amid a stoic market atmosphere, tech shares were mixed.

TDK

(TDK)

gained 990 yen, or 7.3%, to 14,650 134.86), while

NEC

(NIPNY)

shed 100, or 3.5%, to 2765. Local reports said NEC was ready to buy Seattle-based

SJI

, which makes Intranets for corporate clients, for around 6 million to 7 million.

NTT

(NTT)

lost 30,000, or 2.3%, to 1.26 million despite news that its $5.5 billion acquisition of U.S.-based

Verio

(VRIO)

would finally move forward. The Federal Bureau of Investigation was holding up the buy-out over national security concerns.

The greenback rose against the yen to recently fetch 108.50.

Hong Kong's

Hang Seng

index shed earlier gains to close down 118.79 at 17,214.42 after retail investors cleared out positions before the weekend. With the market largely void of any direction, traders said some investors bid up bank shares on expectation that the U.S. would not raise rates this later month.

HSBC

(HBC)

rose HK$0.50 to 108.50 ($13.91).

Telecom shares were mostly lower, with

China Mobile

(CHL) - Get China Mobile Ltd. Report

losing 1.00, or 1.6%, to 62.00, while

Hutchison Whampoa

(HUWHY)

shed 0.50 to 115.00.

Elsewhere in Asia, Korea's

Kospi

index lost 7.07, or 1.0%, to 722.21, while Taiwan's

TWSE

index shed 50.04 to 7974.65.