Tokyo shares close mixed ahead of holidays; Japan Telecom up sharply

TOKYO (AFX-ASIA) - Share prices closed mixed, with some profit-taking from short-term traders ahead of the resumption tomorrow of the Golden Week holiday in Japan and after yesterday's sharp gains, dealers said.	    Trading here will be closed tomorrow and Friday.	    Dealers said the positive sentiment of long-term investors towards the market remains solid, given the restructuring programme of the new government and the recent rebound on Wall Street.	    Japan Telecom rose very sharply after Vodafone announced it will buy stakes in the company and in its mobile phone units currently held by British Telecom. 	    The Nikkei 225 index closed down 3.82 points at 14,421.64, off a high of 14,444.84 and a low of 14,296.54. 	    Some 1.14 mln shares changed hands.	    The Topix index was up 12.55 points at 1,424.24, while the Nikkei 300 was up 2.84 points at 287.05. 	    There were 605 risers and 730 decliners, with 136 stocks unchanged.	    The Nikkei June futures contract was down 40 points at 14,340 on the Osaka exchange and at 14,380 on the SGX.	    Sassoon Securities Tokyo branch manager Masao Miwa said the market saw some light profit-taking from short-term traders after yesterday's sharp gains, although long-term investors remain bullish for Japanese equities.	    He said the market is likely to see further gains after the Golden Week holiday on expectations that new Prime Minister Junichiro Koizumi will hammer out more details of his restructuring programme.	    "Long-term investors still want to buy as the Tokyo reforms are very aggressive," he said. "Next Monday, Koizumi will may make an address with the emphasis on structural reform."	    Miwa said lower-priced companies, including construction firms, fell back on profit-taking on recent gains, helping to pull the Nikkei 225 index lower, though other indices remained positive.	    Nippon Steel fell 7 yen to 222, with Kawasaki Steel declining 4 to 150, Sumitomo Metal down 3 at 97, NKK shedding 2 to 136 and Kobe Steel off 2 at 89.	    Among construction firms, Obayashi fell 25 to 615, Shimizu was down 6 at 579 and Taisei was 11 lower at 334.	    "The Nikkei is basically strong," Miwa said, adding that the index could reach the 15,000 point level on the structural reform theme, with the Topix able to see a further 10-15 pct gain.	    However, he added that there are likely to be winners and losers from the shift in policy, with the focus for investors not so much the key aggregates but specific sectors that may benefit.	    "Pharmaceuticals are very weak because defensives had gained as the stockmarket was going lower," he said. "Rotation is very strong in the market."	    Fujisawa Pharmaceutical, a market darling during the downturn over the past months, fell 150 to 2,390, while Takeda was down 120 at 5,940.	    Miwa said new financial entities that have recently sprung up, such as Sony Bank, IY Bank and Shoko Fund, will be the greatest beneficiaries of restructuring in the sector as they are not saddled with massive bad debts.	    Among non-banks, Promise was up 380 at 10,570, Sanyo Shinpan up 80 at 5,090 and Takefuji up 550 at 10,400.	    Mizuho Holdings was up 8,000 at 803,000, with UFJ Holdings down 14,000 at 956,000.	    Technology stocks were higher after further gains in their U.S. counterparts overnight. Fujitsu rose 60 to 1,803, with NEC adding 45 to 2,360 and Hitachi up 21 at 1,359.	    Exporters were mixed after the yen rose earlier against the dollar but then came off its highs, with Suzuki down 6 at 1,633 and Fuji Heavy down 32 at 912.	    Japan Telecom ended up 400,000 yen or 17.86 pct at 2.64 mln yen after Vodafone announced just ahead of the close that it will buy British Telecom's stakes in the firm and its J-Phone mobile unit.	    Dealers said investors were positive on the deal, which will simplify Japan Telecom's complicated management structure and provide new impetus from the aggressive new shareholder. BT was seen as beset by financing difficulties. 	    However, Shinko Securities analyst Yoshihiko Sakata warned that in the longer term, Japan Telecom will face tough strategic questions related to the deal.	    "In theory, Japan Telecom will benefit from Vodafone's expertise in mobile phone services, such as procurement," he said. "But Vodafone's strategy in the fixed line business is not clear."	    Japan Telecom provides fixed line-based data transmission and IP services, as well as mobile phone services via its J-Phone unit.	    Sakata said that as to whether Japan Telecom can maintain high profitability in the mobile phone business needs to be assessed carefully.	    J-Phone rival and dominant mobile operator NTT DoCoMo was up 60,000 at 2.69 mln yen. 

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