Tokyo stocks rose Monday, buoyed by the U.S. Dow Jones index closing above 40,000 for the first time ever last week, although gains were limited as higher Japanese interest rates prompted selling of some technology-related issues.
The yield on Japan's benchmark 10-year government bond briefly rose 0.030 percentage point from Friday's close to 0.975 percent, its highest level in around 11 years, tracking an increase in long-term U.S. Treasury yields last week.
The 225-issue Nikkei Stock Average ended up 282.30 points, or 0.73 percent, from Friday at 39,069.68. The broader Topix index finished 22.42 points, or 0.82 percent, higher at 2,768.04.
On the top-tier Prime Market, gainers were led by oil and coal product, mining and nonferrous metal issues.
The U.S. dollar was firm in the upper 155 yen range, as market players expected the interest rate differential between Japan and the United States to remain wide, dealers said.
Stocks were widely bought, with the Nikkei benchmark finishing above 39,000 for the first time in around one month, initially led by buying of high-tech shares, analysts said.
Among such issues, chip material maker Shin-Etsu Chemical ended up 4.2 percent after announcing Friday a share buyback plan to enhance shareholder returns.
Still, some gains were erased as investors locked in profits in technology stocks amid fears of rising borrowing costs after Japan's benchmark bond yield reached its highest level since May 2013, analysts said.
The market also grew cautious ahead of earnings by U.S. chip giant Nvidia Corp. due out on Wednesday, they said.
The Nikkei "could easily challenge 40,000 again" if the market views the upcoming figures favorably," said Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co.
