Tokyo shares close higher ahead of new cabinet announcement

TOKYO (AFX-ASIA) - Share prices closed higher on optimism about the reform policy of LDP president Junichiro Koizumi, who will automatically become the new prime minister, dealers said.	    The announcement earlier today of key LDP administration members also supported investor sentiment towards Koizumi's policy management, they said.	    Aozora Bank treasury manager Kazuhiro Nishina said the announcement underscored the fact that Koizumi has not succumbed to traditional faction-led politics.	    However, share prices were pushed off their highs ahead of the announcement tomorrow of a full line-up of the new cabinet, dealers said.	    The Nikkei 225 index closed up 84.32 points at 13,827.50, off a high of 13,920.67.	    Volume was 1.12 bln shares.	    The Topix index was up 13.40 points at 1,341.40, while the Nikkei 300 was up 3.16 points at 269.79.	    There were 853 rises and 509 decliners, with 103 stocks unchanged.	    The Nikkei June futures contract was up 20 points at 13,850 on the Osaka exchange and at 13,840 on the SGX.	    According to the LDP announcement, incumbent state Minister for Economic and Fiscal Policy Taro Aso will become new policy chief.	    Former policy chief Taku Yamasaki will become the party's secretary general, and former minister of trade and industry Mitsuo Horiuchi will be chief of the general council.	    "We cannot become overly optimistic about the prospect of the equity market until we see the faces of all cabinet members," Tokai Tokyo Securities trading department general manager Kunihiro Hatae said.	    Jiji Press reported that former LDP chief secretary Koichi Kato may become new finance minister.	    "His appointment may not negatively affect the market, as he himself is reformist," Hatae said.	    Investors also turned reluctant to push the market sharply higher ahead of the start tomorrow of the corporate profit reporting season, dealers said.	    But Tokai Tokyo's Hatae said the majority hold the view that there will not be any negative surprises from earnings to be reported by leading blue-chips such as Sony.	    Besides, "I think the market has basically digested (the likelihood) that high-tech companies will post a double-digit profit fall (for the year to March 2002) from a year earlier," said Jyujiya Securities dealer Masafumi Okamoto.	    Among high-techs, Advantest was up 210 yen at 15,010, off a high of 15,300, with TDK up 20 at 7,340, off a high of 7,510 and Nihon up 21 at 1,493, off a high of 1,500.	    Semiconductor stocks were broadly higher, with Fujitsu up 39 at 1,784 and NEC up 45 at 2,165 and Mitsubishi Electric up 17 at 737.	    Tokai Tokyo's Hatae said renewed concern over the performance of the U.S. high-techs weighed down the market, triggering active profit-taking among Japanese high-techs on their recent gains.	    "Looking at the recent movement, it is still too early to say that the downtrend on NASDAQ came to an end," he said.	    Construction stocks were higher on speculation that structural reforms may encourage them to more strongly embark on consolidation efforts, dealers said.	    Ohbayashi rose 19 to 603, with Shimizu adding 22 to 547 and Kajima up 22 at 415.	    Banks were broadly higher on the view that any clean-up of bad debt may progress further under the strong leadership of Koizumi.	    Mizuho Holdings closed up 10,000 at 677,000, with Mitsubishi Tokyo Financial Group closing up 30,000 at 1.23 mln and UFJ closed up 37,000 at 812,000.	    Earlier, the Nihon Keizai Shimbun reported that the UFJ Group will bring forward the planned merger of Sanwa Bank and Tokai Bank to Jan 15 from April 2002.	    Sony ended up 100 at 9,030 on the announcement yesterday of a new handset partnership with LM Ericsson AB.	    Societe Generale senior analyst Mamoru Takagi was cautiously positive about the deal, saying that the venture will increase business opportunities in Europe after the high-speed, 3G mobile phone service is launched.	    "From this long-term viewpoint, the deal is positive for Sony."	    "But, the venture may not be able to start contributing to Sony's earnings in the initial one to two years, and there is even a possibility that the venture may pose downside risk on Sony," he said. 

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