TOKYO: Japan's Nikkei share average rose on Tuesday as banking stocks rallied while Takeda Pharmaceutical climbed ahead of news the drugmaker had agreed to buy London-listed Shire for $62.42 billion.The Nikkei ended 0.2 per cent higher to 22,508.69.Takeda Pharmaceutical and Shire announced after the Tokyo market close the acquisition, which includes a combination of cash and shares.During Tokyo trade, Takeda surged 4 per cent and was the third most traded stock by turnover, as investors had anticipated an official announcement of the deal.With more companies reporting full-year earnings, individual stocks will likely provide more direction this week and next, traders said.About 40 per cent of the Topix companies that have reported so far have topped profit estimates, according to Mizuho Securities.
The companies reported a 21.4 per cent rise in pre-tax profits for the last fiscal year ended March 2018, compared with companies' earlier estimates of 16.5 per cent.For the outlook for this fiscal year, they have reported a 2.2 per cent rise in pretax profits, as most companies have weaker dollar-yen assumptions than last year."As companies are forecasting conservative profits this year, the stock market has a hard time digesting the forecasts," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
"We need to wait until the April-June quarter to get a more concrete picture on how companies will be performing throughout the year."Banks were bought, with Mitsubishi UFJ Financial Group advancing 0.9 per cent and Mizuho Financial Group adding 0.6 per cent.The broader Topix gained 0.4 per cent to 1,779.82.