Vodafone's Japanese interest soars

SHARES in Japan Telecom soared in

Analysts had long expected Vodafone, which controls 66.7% of Japan Telecom, to back out of the cut-throat fixed-line business and concentrate on the more profitable mobile phones market through its J-Phone operation, the country's third largest provider.

As confidence in Japan's recovery continued to grow in Tokyo, the Nikkei 225 Average briefly pushed through 12,000 for the first time since 11 September, although later profit-taking left it at 11,979.85, up 17.87 points at the close.

Further evidence of the rebound came today with news that exports had their first year-on-year rise in April, and pushed the trade surplus up 27% to 836.7bn yen (£4.7bn) as overseas sales of cars and electronics goods continued to grow.

Banking stocks led today's rally as investors bet that the improvement in the economy will cut their debt mountain. Gains among the major banks reached almost 4%, despite the knowledge that the top lenders will unveil annual profits tomorrow that are expected to be accompanied by large write-offs from their estimated 23 trillion (£128bn) non-performing loans.

Although the yen steadied against the US dollar after recent sharp rises, shares of motor manufacturers skidded on fears that the currency's strength will eat into their profits A late rally on Wall Street failed to inspire most other Asian markets, which suffered from profit-taking after the earlier big gains. In Hong Kong, the Hang Seng index fell 170.45 points to 11,624.75, toppled by big slides in the two locally quoted mainland mobile phone operators, which are reported to be facing an unexpected demand from the taxman in Beijing.

China Mobile and China Unicom led the market's retreat with falls of about 2%.

Property stocks were still suffering from this week's downgrading of their credit ratings by Standard & Poor's. Leading developer Cheung Kong fell more than 2.5%. Currency woes pressed down on South Korean stocks as the won continued to rise against the US dollar, reducing the competitive edge of electronics exporters. The Kospi index fell 17.55 points to 845.51.

Transport stocks powered Taiwan's Weighted Average up 8.32 points to 5549.96 as further progress was made in talks to reopen direct links with mainland China. Sydney investors ignored Wall Street's dash and the rising gold price, and instead began calculating the impact of the strong Australian dollar on repatriated profits. Resource stocks suffered most, Rio Tinto losing almost 1%, and the All Ordinaries index shed 16.1 points to close at 3324.8.

Thai stocks stood out in south-east Asian markets, lifted by recent successful new issues, and the SET index added 5.88 points to 392.85. The Straits Times index in Singapore dipped 19.72 points to 1717.78, Kuala Lumpur's Composite index slid 5.35 points to 767.59 on disappointing GDP figures. In Indonesia the Jakarta Composite index fell 7.96 points to 503.67.

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