Tokyo shares close higher on Koizumi speech/foreign interest

TOKYO (AFX-ASIA) - Share prices closed higher on positive expectations about progress in structural reforms under new Prime Minister Junichiro Koizumi and amid continued foreign interest, dealers said.	    Imagawa-Misawaya Securities Co Ltd investment information department general manager Yoku Ihara said share price movements in afternoon trade showed investors' high expectations over Koizumi, even if the prime minister did not say anything new during his first policy speech.	    Koizumi simply reiterated his strong commitment to structural reforms, while explaining proposals that were included in the emergency economic stimulus package released in early April.	    "Reflecting improved sentiment, new money -- especially from foreign investors -- continues to come into the market," Ihara said.	    The Nikkei 225 index closed up 107.77 points at 14,529.41, off a high of 14,556.11.	    The Topix index was up 16.73 points at 1,440.97, while the Nikkei 300 was up 3.85 points at 290.90. 	    Trading was active, with 964 mln shares changing hands.	    There were 605 risers and 748 decliners, with 115 stocks unchanged.	    In late trading, the Nikkei June futures contract was up 220 points at 14,560 on the Osaka exchange and at 14,550 on the SGX.	    Imagawa-Misawaya's Ihara also cited recent expansion of the customer base as hard evidence that overall sentiment has improved further.	    "While foreign investors are stepping up purchases of Japanese equities, mainly high-tech leaders, retail investors are actively buying into low-priced stocks and fund managers are chasing index leaders," he said.	    Dealers said receding concerns over earnings problems at Japanese high-tech firms also underpinned sentiment and eased the selling pressure among stocks in this sector.	    Yamamaru Securities information centre chief Hidetoshi Nakanishi said he believes the reported mobile phone production cuts by NEC and Matsushita Communications for their European operations may have already been priced in by the market, given the solid performances by the two stocks.	    "I think these negative factors have been priced in by the market."	    NEC was up 15 yen at 2,375, while Matsushita Communications gained 320 to 7,450.	    This week, among the companies releasing their year to March 2001 results are NTT DoCoMo, TDK, Rohm and Ricoh.	    Imagawa-Misawaya's Ihara said the solid performance of the NTT group and Sony also bolstered the broader market, making it harder for those who started the day with short positions to build up their poitions later in the session.	    NTT DoCoMo was up 200,000 at 2.89 mln yen on the speculation that the stock may be included in the Morgan Capital International global index, dealers said.	    NTT was up 25,000 at 898,000 and NTT Data was up 13,000 at 894,000.	    Sony gained 140 to 9,930.	    Dealers however questioned the sustainability of a further run-up, particularly near 15,000 points on the Nikkei 225 index.	    Yamamaru's Nakanishi said although investors have returned to buy Japanese stocks more actively following the Golden Week holidays, there is no reason why investors should continue to buy actively if the Nikkei 225 reaches 14,500.	    "It is still unclear if the NASDAQ is currently bottoming out," he said. 	    Chuo Mitsui Trust and Banking foreign exchange assistant manager Tomoyuku Nakamura also said even if foreign investors are now actively adjusting their weighting of Japanese equities on hopes of further progress in structural reforms, "just on such expectations, they are not likely to buy Japanese equities as aggressively as they did in 1999."	    Japan Tobacco was 14,000 higher at 823,000 after the Nihon Keizai Shimbun reported Thursday that the company expects operating profit to rise 16 pct to around 145 bln yen in the year to March 2002, the first rise since fiscal 1998, helped by its strong performance overseas and lower costs.	    Nakanishi however said the rise in JT shares will be temporary.	    "If you consider the current moves towards environment and health (issues), I don't think investors, particularly institutional investors, will turn to buy the stocks actively for the long-term."	    He said it is necessary for JT to shift its current tobacco-driven earnings structure and strategy in order to attract long-term buying interest among investors.	    "It is necessary for JT to shift towards increasing production other than that of tobacco, such as (production instead of) food and beverages," Nakanishi said.	    Meanwhile, some laggard stocks drew interest, dealers said.	    Bridgestone rose 120 to 1,637, while Fuji Photo gained 180 to 5,310.	    "They were apparently oversold far beyond their fundamentals recently," Ihara said.	    Komatsu rose 9 to 680 after announcing its year to March 2001 earnings result just before the close. 

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