Tankan helps take Tokyo higher


McDonald's Japan, hard-hit by the mad-cow disease scare, saw its stock strengthen 1.1 percent on Wednesday

TOKYO, Japan -- Tokyo stocks were higher by midday Wednesday after better-than-expected results from the Bank of Japan's quarterly tankan survey led investors to buy high-tech manufacturers such as Sony.

The benchmark Nikkei 225 average ended the morning up 180.58 points or 1.72 percent at 10,654.49, while the broader capital-weighted TOPIX index rose 10.74 points or 1.06 percent to 1,025.43.

Other markets in the region were mixed, with Korea and New Zealand both up slightly, but Australia and Hong Kong weaker.

Taiwan's Taiex continued its post-election surge, adding 190 points to 5464. It has added more than 1000 points or 23 percent since the end of November.

In Tokyo, chip issues including Tokyo Electron Ltd were boosted by a strong performance by their U.S. counterparts. Japanese banks also made some ground after their dismal run so far in December.

UFJ leads bank gains

Sony gained 2.05 percent to 5,960 yen, while Tokyo Electron, a major maker of semiconductor-manufacturing equipment, jumped 5.71 percent to 7,590 yen.

UFJ Holdings, the smallest of Japan's top four banks, bounced 6.27 percent to 305,000 yen, after posting a record low close on Tuesday.

McDonald's Japan, which has been hard-hit by the mad-cow disease scare, saw its stock strengthen by 1.1 percent Wednesday, putting on 40 yen to 3550 yen.

"The tankan came out better than anticipated, and it was certainly a plus for the broader market," Toshihiko Matsuno, deputy general manager of the investment advisory office at Sakura Friend Securities, told Reuters news agency.

"But we have to note that it's not as if sentiment has improved or anything. It may get worse from here as structural reforms administer short-term pain to the economy."

In the closely watched tankan survey, the key diffusion index for large manufacturers came in at minus 38 for December, compared with minus 33 in the previous survey. A Reuters poll of economists had come up with a median forecast of minus 44.

The diffusion index is calculated by subtracting the percentage of companies that say their business conditions are unfavorable from the number that say they are favorable.

Seoul, NZ up

In Seoul, the Kospi was up 2.4 points or 0.36 percent to 672.48, while in New Zealand the Top 40 was up 3.72 points or 0.18 percent to 2071.27.

In Australia, the S&P/ASX200 was down 18.4 points or half a percent to 3342.

Leading bank NAB moved against the trend, adding about 1 percent on news it is selling its loss-making HomeSide unit in the U.S. for about $1.9 billion.

Hong Kong's Hang Seng index was about 78 points lower at 11,615 heading towards the morning close.

Singapore was also weaker, with the Straits Times index down about 15 points or 1 percent to 1587 late in the morning.