There is considerable progress over concerns about the U.S. financialsector

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Tokyo stocks soared Monday, with financials leading the way, as theU.S. bailout of two troubled mortgage finance giants boostedinvestor confidence and abated fears of global financial marketturbulence stemming from the U.S. subprime mortgage crisis.
The 225-issue Nikkei Stock Average rose 412.23 points, or 3.38percent, from Friday to 12,624.46. The broader Topix index of allFirst Section issues on the Tokyo Stock Exchange was up 45.57points, or 3.89 percent, to 1,216.41.
Gains were led by banking, consumer finance and securities. Onlythree sectors declined -- electric and gas, pulp and paper, and airtransport issues.
Brokers said investor sentiment surged after the U.S. government'smove Sunday to seize control of Fannie Mae and Freddie Mac to helpavert a financial system breakdown from the housing crisis.
Financials, especially banking issues, were the day's bestperformers. Value leader Sumitomo Mitsui Financial Group surged89,000 yen, or over 15 percent, to 674,000 yen, while anotherbanking group, Mitsubishi UFJ Financial Group, was the day's volumeleader, jumping by its daily limit of 100 yen, or over 13 percent,to 850 yen.
Mizuho Financial Group, the second most heavily traded issue invalue terms, jumped by its daily limit of 50,000 yen, or over 12percent, to 463,000 yen.
Kazuhiro Takahashi, general manager of the global product planningdepartment at Daiwa Securities SMBC Co., said the market has takenthe move as an "opportunity" to push up the entire market and"dispel the uncertainty" caused by financial woes.
Takahashi said market players were worried about two sets offinancial problems -- the situation involving Fannie Mae andFreddie Mac, both government-sponsored enterprises, or GSEs, andthe fate of investment banks, especially Lehman Brothers HoldingsInc.
"The fact that the GSE problem has been settled means that there isconsiderable progress over concerns about the U.S. financialsector," Takahashi said.
The fates of Fannie Mae and Freddie Mac have been closely watchedby Tokyo market players as Japanese banks and other internationalfinancial institutions have massive holdings of securities issuedby the two mortgage finance firms.
On the First Section, advancing issues outnumbered declining ones1,543 to 147, with 30 others remaining unchanged.
Bargain hunters also fueled buying after sharp declines in Tokyostocks the past two trading days, with the Nikkei index sheddingmore than 400 points during the period, brokers said.
Brokers said the U.S. dollar's appreciation from the mid-106 yenlevel late Friday in Tokyo to the upper 108 yen level Monday duringmarket trading hours also prompted buying of a broad range ofexport-oriented auto and high-tech shares.
Among them, Toyota Motor gained 190 yen, or 4.0 percent, to 4,940yen, and Sony advanced 150 yen, or nearly 4 percent, to 4,030 yen.
But Tsuyoshi Segawa, an equity strategist at Shinko Securities Co.,said it remains to be seen if the dollar will continue rising givenlingering anxiety about the outlook for the U.S. economy.
Worries about the health of the U.S. economy were reinforced Fridayafter the Labor Department said the economy lost 84,000 nonfarmjobs in August for the eighth consecutive month of decline, sendingthe unemployment rate up to 6.1 percent, the highest level sinceSeptember 2003.
Among the decliners were electrical power and gas companies such asTokyo Electric Power, which fell 90 yen, or nearly 3 percent, to3,010 yen, and Tokyo Gas, which lost 10 yen, or over 2 percent, to461 yen.
Trading volume on the main section came to 1,975.15 million shares,down from Friday's 2,279.24 million.
The TSE's Second Section index was up 43.10 points, or 1.76percent, to 2,498.83 on a volume of 46.02 million shares. On theOsaka Securities Exchange, the near-term September Nikkei 225 indexfutures contract was up 450 points to 12,650.
Copyright 2008 Kyodo News International, Inc.
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Kyodo News International, Inc. / Japan Economic Newswire
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