Tokyo reaches high for year on US gains

The Tokyo market climbed Tuesday, lifted by Nasdaq's overnight gain and the promise of economic reform

HONG KONG, China -- Tokyo's Nikkei average jumped more than two percent to its highest level this year by midday on Tuesday.

Investors were encouraged by a recovery in the U.S. Nasdaq and hopes for progress on structural reform in Japan.

Most other Asian stock markets are closed Tuesday for the Labor Day/May Day holiday.

At the midday break, Tokyo's benchmark Nikkei average was up 2.13 percent at 14,231.81, after reaching 14,232.76, its highest intraday level since December 19.

The capital-weighted TOPIX index rose 2 percent to 1,393.73.

Analysts said the market is keeping up last week's momentum, based on strong hopes for progress in reforms by Prime Minister Junichiro Koizumi and his administration.

Old economy issues

The promise of reform at the Group of Seven meeting also fuelled hopes, prompting investors to keep picking up "old economy" issues, including builders and banks, analysts said.

Housing builder Haseko Corp soared 18.18 percent to 65 yen.

Banks were also broadly higher, bolstered by media reports that Koizumi's key policy speech to be delivered on Monday would include vows to solve the bad loan problem in the next two to three years.

Banks were led by a 6.07 percent rise to 943,000 yen by UFJ Holdings.

Nasdaq gains

Technology stocks also posted healthy gains due to Nasdaq's overnight rally. Sony Corp jumped 2.27 percent to 9,450 yen, and chipmaker Hitachi Ltd. soared 8.1 percent to 1,295 due to stronger-than-expected earnings results for the year.

Japan's largest cellular phone Matsushita Communication Industrial Co Ltd gained 1.03 percent to 6.870.

In Australia, one of the few other stock markets open on Tuesday, the benchmark S&P/ASX200 index was slightly stronger by midday, up 1.5 points at 3330.9.

Bluechips BHP, News Corp and Woolworths were all higher. Australia's largest airline Qantas announced a trading halt ahead of an announcement that it was talking to Impulse Airlines, one of its low-fare rivals, about a commercial venture.

Anti-globalisation activists who gathered outside the Australian Stock Exchange building in Sydney Tuesday morning clashed with police. Several police and protestors were injured and a number arrested.

Reuters contributed to this report.

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