Markets

Japan shares close 0.27pc higher

TOKYO : Tokyo shares closed 0.27 percent higher on Wednesday as investor sentiment remained cautious following weak

Published June 1, 2011 Updated June 1, 2011 08:50am

2 min

By Shoaib Ur Rehman

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The benchmark Nikkei index closed 25.88 points higher at 9,719.61. The Topix index of all first-section issues rose 0.93 points or 0.11 percent to 839.41.

"There remains a lack of buying incentives for Japanese shares to break out of range-bound trading," Okasan Securities strategist Hideyuki Ishiguro said.

Investors remained cautious even after US stocks were lifted Tuesday by hopes for a resolution to Greece's debt crisis and signs of recovery in Japan.

"US economic data have been very weak. It supports some of the scepticism about the US reporting season... that it was only strong because of QE2 (quantitative easing), which wasn't sustainable," said Justin Gallagher, RBS head of domestic sales trading in Sydney.

The United States released data Tuesday showing the consumer confidence index slid in May from a month earlier on growing worries about unemployment as well as food and fuel prices.

Another report said manufacturing activity in the Chicago area also slowed for the third straight month in May, while the S&P/Case-Shiller index showed home prices fell for the ninth straight month in March.

At home, Japanese Prime Minister Naoto Kan is expected to face his second vote of no-confidence in less than a year, as opposition lawmakers demanded his resignation over his handling of the Fukushima Daiichi nuclear crisis.

"Foreign investors are concerned that political uncertainty will create policy deadlock and delays in reconstruction," Yumi Nishimura, a senior market analyst at Daiwa Securities, told Dow Jones Newswires.

Japanese car giant Toyota announced its domestic production would return to about 90 percent of its pre-quake level in June thanks to a faster-than-expected recovery of parts supplies. But its shares eased 0.58 percent to 3,380 yen.

Chugoku Electric Power lost 1.64 percent to 1,133 yen after cancelling a plan to start commercial operations at a new unit of its Shimane nuclear power plant in western Japan.

Embattled Tokyo Electric Power Co, which operates the Fukushima complex, dropped 5.67 percent to 299 yen.

Sony was up 0.78 percent at 2,180 yen on a Nikkei report that it will aim to reduce operating losses in its television business by at least half in the current fiscal year.

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