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Tokyo Shares End Higher On Stronger Dollar Amid Thin Volume

TOKYO--Tokyo stocks rose Monday, tracking modest gains in the dollar, allowing heavily indexed shares such as SoftBank and select exporters such as Kyocera to pace the market higher.

The Nikkei Stock Average added 108.02 points, or 0.8%, to 13,758.13 following Friday's 0.7% fall.

The Topix index of all the Tokyo Stock Exchange First Section issues also gained 6.48 points, or 0.6%, to 1,149.13, with 28 of 33 subindexes ending in positive territory.

Participation levels were meager, hitting fresh 2013 lows in an already thinly traded summer session. Total trading volume came to just 1.44 billion shares worth Y1.25 trillion--about a third of average levels in May when stocks reached multi-year highs.

Stocks traded with a slight upward bias from the outset, helped by a more resilient dollar, which stayed above Y97 to end at Y97.63 as of the market close at 0600 GMT.

The market shrugged off both Wall Street's Friday weakness and government data published minutes before the market open showing Japan's July trade deficit hit Y1.02 trillion. The figure came after a Y182.3 billion shortfall the prior month and was much larger than the Y776.4 billion expected by economists.

"Despite the end of the seasonal Obon holiday (last week), traders are slow to return to the market, as there remains a distinct lack of trading incentives," said Tachibana Securities market analyst Kenichi Hirano.

He pointed to the current "dead zone" of data before next month's summit of Group of 20 nations, the decision on Tokyo's bid for the 2020 Olympics, revised Japan GDP data, and the government's decision whether to go ahead with an increase in the sales tax.

Data from China "are also being received with more scrutiny than previously," he added.

Heavily indexed SoftBank and Fast Retailing paced the market higher in line with corresponding Nikkei futures trading. The pair added 2.4% to Y6,320 and 0.6% to Y32,200, respectively.

Exporters are were mixed, with Kyocera gaining 1.6% to Y9,750 and Honda Motor rising 0.8% at Y3,760 up 0.3% to Y3,800. But Suzuki Motor lost 1.0% to Y2,417, while Canon surrendered 0.3% to Y3,060.

Among individual share movers, Kawasaki Heavy Industries gained 2.2% to Y376 following a Nikkei report it will team up with Rolls-Royce to develop a new type of aircraft engine that is 30% more fuel efficient than conventional jet engines.

Sumitomo Metal Mining slipped 0.1% to Y1,389 on the heels of a Credit Suisse target price cut to Y1,230 from Y1,360 to reflect lower price assumptions for nonferrous metals. The brokerage kept its Neutral rating on the stock.

September Nikkei 225 futures closed up 100 points, or 0.7%, at 13,770 on the Osaka Securities Exchange.