Tokyo stocks open firmer

TOKYO, Japan - - Tokyo stocks were firmer in early trade on Monday, with investors hunting for bargains in both defensive and high-tech issues.

This follows the 7 percent fall last week in the benchmark Nikkei 225 index.

Bucking the trend was chip and computer maker Fujitsu Ltd, which late on Friday cut its group operating profit forecast for the year to March 31 to 260 billion yen ($2.18 billion), 16 percent off a previous forecast for 310 billion yen.

Its shares were down 0.99 percent at 1,500 yen. Other techs were mostly higher despite a three percent drop in the U.S. Nasdaq market to 26-month lows.

The Nikkei was 110.23 points or 0.90 percent firmer at 12,372.03 in early Monday trade, while the capital weighted TOPIX was up 0.60 point or 0.05 percent at 1200.44.

"Just a technical rebound"

"Some high-tech stocks look attractive in terms of valuations, but I think it's just a technical rebound in the overall market after falling too far too fast," said Kunihiro Hatae, general manager of Tokai Tokyo Securities' equities trading division.

He said dealers who had sold aggressively last week partly in a speculative move trying to nudge the Nikkei average to pre-determined levels that will in turn trigger hedge-related selling, were unwinding their short positions.

Selling related to derivatives products -- mainly structured bonds with returns linked to the Nikkei's level -- has gathered steam since the Nikkei dipped below 13,000 last week.

But media reports over the weekend that Japan's securities watchdog has launched a probe into foreign brokerages for their trading of so-called Nikkei-linked bonds have encouraged short sellers to unwind their positions in the index futures market, helping stabilise the cash market, analysts said.

Among chip-related stocks, Kyocera Corp jumped 2.9 percent to 9,580 yen after falling 19 percent last week, while Rohm Co Ltd gained 2.53 percent to 17,800 yen after a six-day losing streak in which it lost 16 percent.

Mitsubishi Chemical Corp was 5.17 percent higher at 346 yen. Shares in Japan's largest comprehensive chemical maker were boosted by news it plans to team up with Fujitsu in the development of pharmaceuticals using freshly acquired knowledge on the human genome.

Reuters contributed to this report.

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