Tokyo stocks finished higher Thursday as banks and brokerage issues gained ground on reports of a merger. The U.S. dollar was up against the Japanese yen.
The benchmark Nikkei Stock Average of 225 selected issues gained 80.21 points, or 0.70 percent, to close at 11,553.56 points. The index fell 17.08 points, or 0.15 percent, on Wednesday.
The bank-heavy broader TOPIX, the index of all issues on the Tokyo Stock Exchange's first section, was up 4.90 points, or 0.42 percent, to 1,160.70 points. The TOPIX gained 0.38 point, or 0.03 percent, on Wednesday.
The dollar was trading 105.58 yen at 3 p.m. (0600 GMT) Thursday, up 0.19 yen from late Wednesday in Tokyo but below the 105.68 yen it bought in New York later that day.
On the stock market, major banks and brokers advanced on a newspaper report of a merger between megabank Sumitomo Mitsui Financial Group Inc. and Daiwa Securities Group Inc., Japan's No. 2 securities firm.
The Nihon Keizai business daily reported Thursday that the two plan to merge by the end of fiscal 2005. The report did not cite sources, and company officials declined to comment.
The Tokyo Stock Exchange temporarily suspended trading in SMFG and Daiwa shares following the report.
Sumitomo Mitsui Financial rose, as did Mitsubishi Tokyo Financial Group Inc., Mizuho Financial Group Inc., but one of other Japan's "Big Four" banks, UFJ Holdings Inc. fell. Securities firms Nomura Holdings Inc. and Nikko Cordial Corp. finished higher.
Tokyo blue chips initially fell following Wall Street's overnight fall, but some select issues, including Canon Inc. and Kyocera Corp., rose. But Sony Corp. and automaker Honda Motor Co. were among losers.
In New York, stocks sagged Wednesday in a bout of profit-taking.
The Dow Jones industrial average fell 60.52, or 0.56 percent, to 10,664.11. The tech-heavy Nasdaq composite index skidded 34.13, or 1.64 percent, at 2,052.55.
In other currencies, the dollar moved in narrow ranges against the yen and the euro in Asian trading Thursday, as players held back ahead of U.S. trade data due out later Thursday in Washington.
"The market's looking for concrete evidence to persuade them (players) that the various reasons they had for selling dollars last year -- such as concerns over the U.S. deficits and moves by Asian central banks to sell dollars -- are no longer relevant," said Masamichi Koike, head of spot foreign exchange trading at Sumitomo Mitsui Banking Corp.
The yield on Japan's benchmark 10-year government bond rose to 1.4050 percent from Wednesday's finish of 1.3650 percent. Its price dropped 0.34 point to 99.09.