Tokyo, Apr 4: Tokyo stocks are expected to rise on Tuesday after investors reacted strongly to positive signs in a key business sentiment survey the previous day, underlining a strong appetite for stocks at the beginning of a new fiscal year.
Real estate and other sectors dependent on a strong domestic economy will likely gain, while resource-related stocks could also rise after rises in oil, gold and other commodity prices.
The Bank of Japan's tankan survey, released on Monday, showed that while business confidence among Japan's big manufacturers slipped unexpectedly in the three months to March, they reported an upbeat outlook and robust capital spending plans.
''The market focused on only the good things in the survey.
That suggests how far and fast the market sentiment has improved,'' said Katsuhiko Kodama, senior strategist at Toyo Securities.
''With trading volume growing in line with a stock rally, the market is set to test the upside for now,'' he said.
''Although we're aware of a warning from technical charts (of an overbought market), the time doesn't look ripe yet for selling,'' he added.
Traders expect the Nikkei to move between 17,100 and 17,450 on Tuesday.
It finished Monday up 273.65 points, or 1.6 percent, at 17,333.31, its highest close since July 2000. It has risen for the past seven sessions.
The TOPIX index rose 1.53 percent to 1,754.64, its highest since February 2000.
In Chicago, Nikkei futures expiring in June closed at 17,380, a gain of 30 points from the Osaka finish.
The Tokyo stock exchange has shortened overall afternoon trading by 30 minutes to avoid computer system problems. Trade will begin at 1 p.m. (0400 GMT) instead of the usual 12:30 p.m.
and will finish at 3 p.m.
STOCKS TO WATCH -- Aeon Co.
Asia's biggest retailer by sales said late on Monday it planned to spend 68.8 billion yen (4.4 million) to raise its stake in its shopping centre developer affiliate, Diamond City Co., to 60.11 percent.
-- Aiful Corp.
The consumer financing company revised down its 2005/06 earnings forecasts. The company now expect a group net profit of 67.9 billion yen, down from its previous estimate of 89.12 billion yen.
-- Softbank Corp.
Softbank plans to borrow a total of 1.28 trillion yen ( billion) from a loan syndicate consisting of Japanese, U.S. and European financial institutions to fund its tender offer for Vodafone KK, the Nihon Keizai business daily said on Tuesday.