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Nikkei gains on property firms' rebound, Softbank

Written by: Staff
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TOKYO, Mar 17 (Reuters) The Nikkei average rose 1.51 per cent on Friday, with shares in property firms rebounding after comments by the Bank of Japan governor the previous day helped ease concerns about higher interest rates.

Shares in Softbank Corp. gained, helping boost the Nikkei in late trade on news the Internet firm was close to reaching an agreement to buy Vodafone Group Plc's struggling Japanese mobile phone unit.

Shares in Toshiba Corp. may rise on Monday after the electronics maker said it expects to pay its highest full-year dividend in five years -- 6.5 yen per share for the business year ending this month.

Bank of Japan Governor Toshihiko Fukui sought on Thursday to tame expectations of an imminent rate hike, saying the central bank would keep rates near zero for a while despite ending its ultra-easy policy framework last week.

''That has definitely had an impact on the market,'' said Yoshihisa Okamoto, senior vice-president at Fuji Investment Management, referring to Fukui's comments.

''It relieved some concern -- that was the one thing everyone had been most worried about.'' The Nikkei finished up 243.52 points at 16,339.73.

The broader TOPIX index was up 1.15 per cent at 1,663.98.

Mitsui Fudosan Co. Ltd., Japan's largest real estate developer, was up 2.4 per cent at 2,570 yen. Property firms tend to borrow heavily and are sensitive to interest rate changes.

Softbank rose after sources said it was close to an agreement to buy Vodafone Japan KK for .6-15.4 billion.

Shares in the Internet firm finished up nearly 4 per cent at 3,140 yen, becoming the biggest contributor to the Nikkei's advance.

Sanyo Electric Co. rose 2.7 per cent to 307 yen. Taiwan's Quanta Computer Inc., the world's top contract maker of laptop computers, said it would set up a joint venture with Sanyo to make and sell LCD televisions.

DIVIDENDS IN FOCUS ''Investors are also buying shares in firms with attractive dividend yields ... such as steel makers and gas and electric power companies,'' said Hiroaki Kuramochi, managing director at Bear Stearns (Japan).

Nippon Steel Corp. rose 1.3 per cent to 458 yen, while Kobe Steel Ltd. added 1.6 per cent to 434 yen.

Brokerages extended recent gains after many of them increased their dividend forecasts earlier this month.

Nomura Holdings Inc., the nation's biggest brokerage, rose 3.5 per cent to 2,505 yen.

Silicon wafer maker SUMCO Corp. advanced 1.1 per cent to 5,480 yen after posting an 89 per cent jump in annual profit.

Sumitomo Trust&Banking Co. gained 3 per cent to 1,229 yen after sources familiar with the matter said it would spend about 40 billion yen (2 million) to buy preferred shares currently held by the government in a small Tokyo bank.

Sumitomo Trust said in a statement on Friday that it and Yachiyo Bank are discussing the matter.

Seiko Epson Corp. added 2.9 per cent to 3,170 yen after the maker of printers said it expected a recurring profit of 40 billion yen in the year starting in April, which would be a 54 per cent jump from its 2005/06 projection.

Trade volume hit the lowest in more than a year with 1.53 billion shares changing hands on the first section. Advancers swept past decliners 1,261 to 338.

REUTERS SD SSC1432

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