* Nikkei up 0.3 pct helped by economy hope after ISM data
* SMFG trims gains on news it plans $8.7 bln share sale
* JAL extends rise after 2/3 of employees approve pension cuts
By Aiko Hayashi
TOKYO, Jan 5 (Reuters) - Japan's Nikkei average hit a
15-month closing high on Tuesday after solid U.S. manufacturing
data boosted investor confidence in the economy, lifting some
blue-chip shares such as Canon Inc <7751.T>.
But the market pared earlier gains after sources said
Sumitomo Mitsui Financial Group <8316.T> was planning a $8.7 bln
share sale, leading the yen to strengthen on prospects of foreign
investors buying the stock. []
"The story about SMFG's capital raising led the yen to
strengthen and that was the main reason why shares of exporters
lost ground," said Hiroaki Kuramochi, chief equity marketing
officer at Tokai Tokyo Securities.
Large-scale equity fund-raising by Japanese firms put
pressure on the market during 2009. Analysts have been expecting
SMFG and Mizuho Financial Group <8411.T> to follow in the
footsteps of top lender Mitsubishi UFJ Financial Group <8306.T>,
which aims to raise 1 trillion yen through a share sale.
The benchmark Nikkei <> inched up 0.3 percent to
10,681.83, its highest close since Oct. 3 2008, after rising as
high as 10,791.04 at one stage. It remained well above its 25-day
moving average of around 10,100.
The broader Topix <> rose 0.4 percent to 919.57.
Japan Airlines Corp <9205.T> gained 2.3 percent after the
struggling airline said on Monday that more than two-thirds of
its employees have agreed to proposed pension cuts, clearing a
key hurdle in its push to reduce its pension shortfall, a
prerequisite for a state bailout. []
The dollar slipped 0.8 percent against the yen to around
91.80 yen <JPY=>, having fallen from a four-month peak of 93.22
yen hit on trading platform EBS on Monday.
Investors fret about a stronger yen as it eats into
exporters' profits when there are repatriated. Toyota Motor Corp
<7203.T> slid 2.2 percent to 3,805 yen.
"Profit-taking is weighing on the market as the Nikkei has
gone way above its 25-day moving average and as the dollar/yen is
now trading at 91 yen," said Fumiyuki Nakaniashi, manager at SMBC
Friend Securities.
Data showing the Institute for Supply Management's facturing
index in December rose to its highest level since April 2006, and
helped push both the Dow <> and the S&P 500 <.SPX> to their
highest close in 15 months. []
The Japanese market also gained on hopes for the economic
recovery following the data before losing steam.
Trade picked up on the Tokyo exchange's first section, with
2.1 billion shares changing hands, above last week's daily
average of 1.6 billion.
Advancing shares outnumbered declining ones, 792 to 715.
(Additional reporting by Elaine Lies; Editing by Edwina Gibbs)
