Fearless foreigners rush to Japan

FURTHER signs that

A near-16% slump in machine tool orders in January, which showed manufacturers still lack confidence to invest, was shrugged off and the Nikkei 225 Average moved up through the 12,000 level for the first time in more than seven months before some profit-taking pared gains.

Other Asian markets were mixed, although Friday's strong performance on Nasdaq inspired selected buying of technology stocks, with Taiwan's semiconductor sector the region's biggest gainer.

The Nikkei peaked at 12,034.04, its highest since 9 August last year, before selling pressure pulled the index back to 11,919.30 for a gain of 33.51.

Some analysts are questioning the ability of the Japanese markets to hold their recent strength in the face of continuing poor economic data. Machine tool orders, a key leading indicator, showed a 15.6% drop to a 14-year low, sparking some weakness in the yen, although the figures came as no real surprise after the poor gross domestic product and investment figures released last week.

Cynics' scepticism about the possibility of real corporate reform in Japan was reinforced by reports that the ailing building group Fujita, which owes billions of yen to the banks, is being bailed out yet again. This was good news for the company's stock, which soared more than 30% at one point, but the move carried the messaged that hard decisions are still being avoided.

An early bout of profit-taking in Hong Kong stocks following last week's near-8% gain was later reversed as buyers moved in on trading stocks that should benefit from the US recovery.

The Hang Seng added 29.07 points to 11,262.30, but property stocks remained weak on reports that poor sales will see hefty falls in profits of major developer Sun Hung Kai. Its shares shed 0.8%.

Friday's 2.5% climb on Nasdaq on hopes that consumer spending will lift profits of battered technology companies, set the bulls running in Taiwan once more, and the Weighted Average soared 184.61 to 6196.26, cementing a gain of 12% on the year. Investors were also factoring in an easing of a government ban on semiconductor companies setting up cheap and profitable plants in mainland China. Major chipmakers United Microelectronics and Taiwan Semiconductor responded with gains of up to 4%.

Some futures-inspired selling rocked the Kospi in Seoul, but after a brief period in the red, it recovered and added a modest 1.75 to 827.02.

A warm profits message from Intel Corporation on Friday helped Singapore's technology stocks, but some cashing-in of recent profits left the Straits Times index up a bare 8.15 points at 1807.14.

Australian stocks continued to retreat from recent highs, as banks and resources stocks fell on warnings that recent rises had been too generous, and the All Ordinaries index dipped six to 3422.1.

Blue-chip buying pushed the Kuala Lumpur Composite index up 11.36 to 758.99. The Jakarta Composite index also advanced 3.12 to 478.24, but Thailand's SET slipped 2.77 to 387.88.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.