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Japan’s Nikkei Ends Higher, Gains Capped Amid Continued Concerns Over Global Financial Crisis

Japan’s benchmark Nikkei stock index closed higher Monday, but gains were capped amid ongoing concerns over a global financial crisis following the failures of U.S. regional lenders and the collapse of a major European bank.

The 225-issue Nikkei Stock Average added 91.62 points, or 0.33 percent, from Friday to close the day at 27,476.87.

The broader Topix index, meanwhile, gained 6.52 points, or 0.33 percent, to finish at 1,961.84.

Reports that the assets and loans of collapsed U.S. lender Silicon Valley Bank will be bought by rival First Citizens BancShares sent the U.S. dollar higher versus the yen, giving exporters here room to breathe amid continued chaos in the financial sector, investment analysts here said.

The U.S. dollar was quoted at 130.92-93 yen in Tokyo at 5 p.m., compared with 130.69-79 yen in New York and 130.25-27 yen at 5 p.m. on Friday in Tokyo.

The euro, for its part, fetched 1.0750-0752 and 140.74-78 yen against 1.0757-0767 and 140.65-75 yen in New York and 1.0827-0829 and 141.03-07 yen in late Friday afternoon trade in Tokyo.

But while exporters gained on the yen’s retreat and technology issues attracted buying, bolstered by their U.S. peers’ recent gains, financial issues here sank amid concerns over a widening global banking crisis, local brokers said.

These concerns were exacerbated by further instability in Europe’s financial sector, following Germany’s Deutsche Bank tumbling late last week as the cost of insuring the bank’s debt against the risk of default skyrocketed, analysts here explained.

“Participants were still feeling uncomfortable about the health of the banking sector, which is unlikely to see a complete recovery very quickly,” Koichi Fujishiro, a senior economist at Dai-ichi Life Research Institute, was quoted as saying.

Financial issues under intense pressure Monday included megabanks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group losing 0.5 and 1.0 percent, respectively, while regional lenders also took a major hit.

Among these, Shizuoka Financial Group retreated 1.1 percent, Chiba Bank fell 1.2 percent and Concordia Financial Group dropped 1.7 percent.

Nikkei heavyweight Fast Retailing, operator of the Uniqlo chain of clothing stores, helped prop up the Nikkei, however, closing 1 percent higher, although fellow heavyweight, chipmaking equipment maker Tokyo Electron slumped 2.5 percent.

Real estate issues found favor, with Mitsubishi Estate closing up 1.1 percent, while Mitsui Fudosan also finished in positive territory, climbing 1.6 percent.

Exporters advanced on the yen’s retreat, with Hitachi climbing 2.1 percent, while NEC ended the day 1.6 percent higher.

By the close of play, wholesale trade, real estate and rubber product-oriented issues comprised those that gained the most.

The turnover on the first trading day of the week came to 2,288.42 billion yen (17.41 billion U.S. dollars).