Nikkei climbs on US debt deal, banks rise

The Nikkei stock average climbed back above 10,000 at one point on today, the first time in three days,after U.S. President Barack Obama said congressional leaders had reached an agreement to lift the U.S. debt ceiling, which triggered a broad-based market rally led by financial institutions such as Mitsubishi UFJ Financial Group.

The Nikkei Stock Average rose 131.98 points, or 1.3%, to 9965.01 following Friday's 0.7% slide. It was the sharpest percentage point gain for the index since June 29, and helped erase a portion of last week's 3.0% fall.

The Topix index of all Tokyo Stock Exchange First Section issues also added 10.33 points, or 1.2%, to 851.70, with all 33 subindexes ending in negative territory.

Stocks opened higher, largely on expectations for a conclusion to stalled U.S. negotiations on raising the nation's debt ceiling. Obama's confirmation of a long-awaited deal sent stock prices even higher, and the Nikkei subsequently topped the 10,000 mark. Liberal profit-taking soon kicked in, however, erasing some of the gains by the end of the day.

"We don't know yet how the ratings agencies will respond to the U.S. debt agreement," said Yutaka Yoshii, general manager at Mito Securities. "Once the initial market enthusiasm dies down, there is a possibility that investors will once again focus on the weaker-than-expected U.S. GDP figures."

The end to the often rancorous standoff in Washington, however, was a salve for banks, which between them hold large troves of U.S. Treasury bonds. Mitsubishi UFJ Financial Group rose 4.1% at Y408, while Sumitomo Mitsui Financial Group also added 2.9% at Y2,905. The pair were aided by solid quarterly earnings results delivered last Friday; MUFG posted a record group net profit for the period ending June 30. Mizuho FG also rose 2.4% to Y130.

Among other earnings-oriented shares, NTT Docomo rose 1.6% to Y143,800 following solid first quarter results showing a net on-year profit rise of 12% thanks to an increase in smartphone users.

"We now see the possibility of management issuing a guidance hike in the second quarter," Deutsche Securities analyst Yoshio Ando wrote in a client note, adding that smartphone sales and revenue trends for users shifting to smartphones have been strong.

Easing concerns over U.S. debt problems helped factory automation machine manufacturer Fanuc hit an all-time high of Y15,420 intraday as investors targeted so-called "economy-sensitive" stocks. Fanuc closed up 4.6% at Y15,280. Fast Retailing also hit a 2011 high before ending up 2.4% at Y14,010.