Share prices closed sharply higher, the benchmark index ending at its highest level in more than five years, with market sentiment buoyed by corporate earnings and the strength of the US dollar, dealers said. The Nikkei 225 Stock Average finished up 90.55 points or 0.55 pct at 16,551.23, after touching a high for the day of 16,754.60. It was the Nikkei's highest closing mark since Sept 4, 2000, when it settled at 16,688.21
The broader TOPIX index of all first-section shares closed up 13.96 points or 0.8 pct at 1,704.28, off a high of 1,721.92. Gainers beat losers 1,083 to 500, with 86 issues unchanged. Volume rose to 3.02 bln shares from 2.43 bln shares on Friday. Dealers said solid industrial output data, released in the morning, also supported the market.
The government reported that industrial output rose a seasonally-adjusted 1.4 pct in December from the previous month, rising for the fifth straight month, and was up 3.8 pct year-on-year. The market consensus was for month-on-month growth of 1.8 pct. At the close of share trading here, the dollar was quoted at 117.33 yen. "The market is filled with good leads today, including the stronger dollar and upbeat corporate earnings results, following a positive surprise last week in Sony's report," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
But he warned that the market has already priced-in sound earnings, and is thus likely to remain top-heavy, with the Nikkei perhaps hovering around the 16,500-point mark. He also said: "I don't think earnings reports for Sharp and Matsushita Electric Industries, so called 'winners', will be a surprise like Sony but, rather, in line with expectations."
Sharp and Matsushita will release their earnings reports on Wednesday and Thursday, respectively.