Japanese domestic stocks rose on Wednesday morning, led by another sharp rise in the banking sector. The bank-heavy Topix rose 0.8 per cent to 1,603.69. But the tech-heavy Nikkei 225 rose only 0.5 per cent to 15,501.86 – dragged down by the poor performance of some high-tech shares. Banking rose 2.6 per cent, as investors continued to buy shares with a strong domestic focus. Banks also continued to benefit from a bullish report on the sector from Goldman Sachs on Monday. Mitsubishi UFJ, the world’s biggest bank by assets, was up 2.5 per cent to Y1,670,000. Mizuho, Japan’s second biggest bank, rose 2.7 per cent to Y951,000. SMFG climbed 4.2 per cent to Y1,240,000. The domestically focused real estate sector also performed well. Mitsubishi Estate, Japan’s second biggest real estate company, was up 2.1 per cent to Y1,908. Mitsui Fudosan, the market leader, rose 0.5 per cent to Y2,070. But Matsushita Electric, the world’s largest consumer electronics maker, fell 2.9 per cent to Y2,325, after saying it would have to spend more than Y10bn on recalling faulty kerosene heaters. Tokyo Electron, the world’s second biggest maker of chip-manufacturing equipment, and Advantest, the world’s biggest maker of chip-testing equipment, both declined. Tokyo Electron slipped 3.1 per cent to Y7,270. Advantest was down 2.4 per cent to Y11,000.

Japanese Government Bonds  opened higher on reports late yesterday of JGB buybacks by Ministry of Finance in the next fiscal year totaling Y12  Trillion.. The bonds did trade off a bit at mid-session but came back up into the close. The yield on the benchmark 10-year issue closed at 1.535%, down from 1.555% at  the close yesterday.