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Last Updated: Monday, 22 August 2005, 07:33 GMT 08:33 UK
Japan markets hit four year high
Bank workers reflected in an index of share prices
Japanese shares are touching four year highs
Japanese shares closed at four year highs on Monday as stock markets benefited from the healthier prognosis for the Japanese economy.

The Nikkei-225 index closed at its highest level since August 2001, having risen 160.78 points, or 1.3%, to 12,452.51 in a strong day's trading.

The prospect of stronger economic growth has cheered investors with finance shares particularly benefiting.

Markets have shrugged off uncertainty surrounding next month's election.

Japanese Prime Minister Junichiro Koizumi called a snap poll last month after his plans to privatize the country's post office were rejected.

Foreign interest

Foreign investors have shown increased interest in Japanese shares in recent weeks amid signs of a sustained economic turnaround and the feeling that shares were better value than in the US and Europe.

High oil prices - which remained above $65 a barrel in Asian trading on Monday - have also added impetus to the market.

Higher oil prices are certainly a concern but for the moment, they appear to be good for markets outside the United States
Toshihiko Matsuno, assistant general manager of investment research at SMBC Friend Securities

The Topix index of more widely held shares also closed at its highest level since August 2001, up 1.54% to 1,269.82.

"If you look at what foreign investors are doing, it seems as if they are continuing to buy on the assumption that Japanese stocks are lagging behind their European counterparts," Katsuhiko Kodama, head of equities at Toyo Securities, told Reuters.

Banking on recovery

Banking stocks have benefited from the economic recovery with all the country's leading banks enjoying gains in recent weeks.

Mizuho, Japan's top lender, rose 3.6% to 580,000 yen on Monday while Tokyo Financial Group and Sumitomo Mitsui Financial Group both added more than 2% each.

Although high oil prices presented a potential threat to economic growth, analysts said, they were currently helping the market.

"Higher oil prices are certainly a concern but for the moment, they appear to be good for markets outside the United States," Toshihiko Matsuno, assistant general manager of investment research at SMBC Friend Securities, said.


SEE ALSO:
Economic growth on track in Japan
12 Aug 05 |  Business
Soaring oil hits Japanese trade
11 Aug 05 |  Business
Reform stalls as Japan poll looms
08 Aug 05 |  Business


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