Tokyo shares up 0.48pc by noon

TOKYO: Tokyo shares gained 0.48 percent Friday morning as sentiment brightened on capital spending plans by major Japanese firms and encouraging US manufacturing data.

The headline Nikkei-225 index at the Tokyo Stock Exchange rose 46.76 points to 9,862.85 after closing at a seven-week high the previous day.

The Topix index of all first-section issues added 0.42 percent, or 3.59 points, to 852.81.

Japan's government issued a raft of economic data before the market opened, showing consumer prices rose more than expected in May. The jobless rate fell in the month, with that data excluding disaster-hit areas.

The Bank of Japan's closely monitored quarterly Tankan survey showed business confidence among major manufacturers in June dropped to "minus nine" from "six" in March, logging the first negative reading in five quarters.

Despite the weaker-than-expected headline figure, investors welcomed a Tankan forecast showing that big firms plan to increase capital spending by 4.2 percent for the current fiscal year, analysts said.

"Capital spending is a reflection of the corporate earnings outlook so the market positively views an aggressive stance by firms to use their ample cash flow for investment," said Fumiyuki Takahashi, an equity strategist at Barclays Capital Japan.

In New York the Dow Jones Industrial Average surged 1.25 percent after Greek lawmakers voted to implement a vital austerity plan and data showed business activity was up in the US industrial heartland of Chicago.

"Even as we saw improvement in Japan's supply chain, economic indicators had shown a sluggish recovery of US manufacturers. So the Chicago data is encouraging," said Kazuhiro Takahashi, general manager at Daiwa Securities.

But Takahashi added: "It's unclear how much of the upward trend (in shares) is due to the end of the month window-dressing, so we need to watch closely whether the gains are sustainable."

Mainstay shares posted gains, with Toyota rising 0.90 percent to 3,330 yen and Sony advancing 0.14 percent to 2,120 yen.

Copyright AFP (Agence France-Presse), 2011