TOKYO: Japanese shares added 1.14 percent in the early Friday session as investors cheered merger talks between two major steelmakers, but caution remained ahead of the release of key US jobs data.The headline Nikkei index jumped 118.66 points to 10,550.02 points at the Tokyo Stock Exchange by the lunch break, after Nippon Steel and Sumitomo Metal Industries said Thursday they plan to merge by October 2012.
The Topix index of all first section shares rose 1.00 percent or 9.25 points to 936.82.The announcement by the steelmakers was welcomed by political leaders and analysts alike as a move that would help Japan become more competitive on the global stage.The news came on top of a series of solid earnings from major corporations, further brightening investor sentiment.
"There are hopes that (the steel sector) realignment will spread to other sectors," Okasan Securities strategist Hideyuki Ishiguro told Dow Jones Newswires."The foreign investor perspective on Japanese firms is becoming more positive," he said.But there was also caution ahead of key US payrolls data due later Friday.
"The US jobs data often serve as a turning point for markets so there is a risk that US shares may face a correction after the release," Yutaka Miura, senior technical analyst at Mizuho Securities, told Dow Jones Newswires.In morning trade, Nippon Steel jumped 9.05 percent, while Sumitomo Metal soared 16.06 percent.Their rival JFE Holdings added 2.38 percent.Among other blue chip shares, Sony rose 2.23 percent. Hitachi rose 1.69 percent.Toyota Motor gained 1.16 percent. Mitsubishi UFJ Financial Group rose 1.83 percent.
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