Tokyo shares close higher on NASDAQ gains; Nikkei 225 capped by options trade

TOKYO (AFX-ASIA) - Share prices closed higher after gains on NASDAQ overnight but the Nikkei 225 index was capped by options-related selling, as well as uncertainty over earnings outlooks and changes to MSCI benchmarks, 

dealers said.

	    Kankaku Securities equities manager Yoshihiko Kuroichi said a large number of Nikkei 225 index equity-bonds reached expiry yesterday and today, helping to cap the upside of the benchmark, despite the sharp gains in U.S.

stocks.

	    "The brokers who set up these schemes also bought the Nikkei as a hedge. With the end of the term, they have sold the futures," Kuroichi said.

	    The Nikkei 225 index closed up 216.40 points at 13,910.67, off a high of 13,975.12 and a low of 13,725.25. Trading volume was 723 mln shares.

	    The Topix index was up 19.91 points at 1,376.94, while the Nikkei 300 was up 3.91 points at 276.63.

	    There were 971 risers and 359 decliners, with 130 stocks unchanged.

	    The Nikkei June futures contract was up 240 points at 14,000 on the Osaka exchange and at 14,015 on the SGX.

	    WestLB associate director Takafumi Ochiai said that some 15 bln yen in option-linked bonds expired yesterday, with the figure expected to be some 

25-26 bln today, adding that it is unclear whether there will be more large expiries.

	    He added that the market is also capped by uncertainty over earnings for high-tech companies after the poor outlook earlier reported by Murata, despite increasing expectations that the microchip cycle may be bottoming.

	    "The market will be in a narrow range for the time being," Ochiai said, adding that changes to the construction of the MSCI international benchmarks 

to be announced at the end of this week are also keeping investors sidelined. 

	    "For the short-term ... the chip stocks results are worse than expected so we expect some consolidation," he said.

	    "For the medium-term the market will be gradually going up because in the second half the semiconductor market will be rebounding," Ochiai said. 

	    Kyocera, which reported strong earnings yesterday, rose 830 yen to 11,680, with Rohm adding 1,770 to 23,280 and Tokyo Electron 200 higher at 8,840.

	    Murata was up 260 at 10,000, rebounding from earlier losses after it issued a profit warning on Tuesday.

	    NTT fell 6,000 to 820,000 ahead of the release of earnings at the close that came in just below the company's forecasts.

	    Toyota was up 210 at 4,240 after positive results and forecasts yesterday, while Nissan was up 8 at 845 ahead of results that came in after the close well above the company's own estimates.

	    Tokyo Mitsubishi Securities senior analyst Hideaki Aonuma, who expects Toyota's year to March 2002 pretax profit to rise to over 1.0 trln yen, said 

he maintained his "outperform" rating on the stock and a target price of 4,500 yen.

	    Trading houses were generally lower after releasing results earlier today, with Mitsui down 2 at 732, Sumitomo Corp down 8 at 867 and Mitsubishi Corp up 9 at 943.

	    In the drug sector, Yamanouchi was flat at 3,440 and Fujisawa up 30 at 2,780, both after results.

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