TOKYO (CBS.MW) - The Nikkei Average closed at a two-month high Thursday, as market relief that the U.S. Federal Reserve's Wednesday interest rate hike was in line with expectations gave way to hope when a key Japanese business survey was even more bullish than expected.
The Nikkei Average ended up 37.14 points, or 0.3 percent, at 11,896.01, its highest close since April 28. The benchmark rose as much as 1.1 percent and came within 2 points of breaking the key 12,000 level, but pared gains toward the close as bank stocks dropped.
The broader Topix couldn't sustain its five-session winning streak, ending less than a tick lower, down 1.18 point, or 0.1 percent, at 1,188.42.
On Wednesday, U.S. stocks posted modest gains after the Federal Open Market Committee raised interest rates for the first time in four years as widely expected. See full story. Thursday morning in Tokyo, the large manufacturers' sentiment index of the Bank of Japan's tankan business survey came in at 22, beating the consensus forecast for 17. See full story.
"The Fed did what it was supposed to do - they raised interest rates by a quarter-point, which was well received by the markets, and today we saw the release of the tankan, which was far better than expected," said Robert Sasaki, managing director at Bear Stearns in Tokyo. "The Japanese economy has not been this strong in almost two decades, and investors were caught completely off guard. Investors expected a good number, but not a great number."
Other regional markets were mixed.
China's Shanghai Composite was up 3 percent, Australia's S&P/ASX 200 index added 0.1 percent and Singapore's Straits Times index was up 0.3 percent.
South Korea's Kospi lost 1 percent and Taiwan's Weighted Average eased 0.04 percent.
Markets in Hong Kong and Thailand are closed.
In Tokyo, techs and exporters gained on the strong tankan survey.
But heavy profit-taking on bank shares following their recent rally weighed on the benchmarks' advance. Goldman Sachs reportedly cut its view on that sector to neutral from attractive.
All four major banking groups fell more than 2.9 percent, led by UFJ Holdings , which tumbled 5.4 percent.
Softbank Investment /zigman2/quotes/200067066/delayed JP:8473 -0.98% erased early gains to end down 1.5 percent. The Japanese joint venture capital unit of Internet investor Softbank /zigman2/quotes/207303954/delayed JP:9984 +0.29% /zigman2/quotes/202815238/delayed SFTBF -1.28% said Thursday it has agreed to buy unlisted midsize brokerage Ace Securities to strengthen its brokerage operations. The company said it will offer 5.38 billion yen ($49.7 million) to acquire 67.9 percent of Ace Securities.
Bridgestone /zigman2/quotes/205589013/delayed JP:5108 -0.33% /zigman2/quotes/204111038/delayed BRDCY -2.46% rose 1.5 percent. The world's largest tiremaker expects its net profit for the year through Dec. 31 to rise 9 percent to 97 billion yen on robust sales of tires around the world, compared with the company's early projection for a 15 percent fall to 75 billion yen, the Nihon Keizai Shimbun reported.
Among the notable gainers, Toyota Motor /zigman2/quotes/203803129/delayed JP:7203 +0.54% /zigman2/quotes/200537742/composite TM -2.81% rose 1.6 percent, Sony /zigman2/quotes/201361720/delayed JP:6758 +2.94% added 1.2 percent and mobile giant NTT DoCoMo was up 1 percent.
The dollar traded at 108.07 yen in late Tokyo, compared with 108.79 yen late Wednesday in the United States.
In Seoul, Samsung Electronics /zigman2/quotes/203012110/delayed SSNGY 0.00% fell 2.5 percent.
LG Electronics shed 1.1 percent. South Korea's second-biggest electronics maker on Thursday said it has decided to sell digital cameras in the third quarter of this year, Yonhap News reported.
Hyundai Motor /zigman2/quotes/203763750/delayed HYMLY 0.00% lost 2.1 percent. The nation's largest automaker on Thursday reached a tentative agreement for a wage hike with its union and said that striking workers will resume work Friday, AFX News reported.
In Sydney, News Corp. /zigman2/quotes/204787942/composite NWS -4.78% added 0.3 percent. The media giant controlled by Rupert Murdoch has sold its 40 percent stake in the Staples Center in Los Angeles and will take a related $7 million loss. See full story.