Investors cheer international push by Japan banks

[September 25, 2008]  TOKYO (AP) -- Shares of major Japanese banks and brokerages rose Wednesday as investors cheered a global shopping spree by Tokyo's financial giants in the wake of a historic Wall Street shake-up.

Nomura Holdings Inc., Japan's biggest brokerage, said late Tuesday it would buy Lehman Brothers' operations in Europe and the Middle East, adding to the Asian operations it bought a day earlier from Lehman, which filed for bankruptcy last week.

Nomura's shares jumped 6.85 percent to 1,528 yen in afternoon trading. That's on top of a nearly 10 percent jump in the stock on Monday.

Top Japanese bank Mitsubishi UFJ Financial Group Inc. advanced 5.23 percent to 945 yen after it announced late Monday that it has agreed to buy up to a 20 percent stake in U.S. investment bank Morgan Stanley.

And Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank, rose 2.81 percent to 695,000 yen on media reports Wednesday that it is considering investing several hundred billion yen in Goldman Sachs.

Sumitomo Mitsui said no decision has been reached at this time and declined to elaborate.

The gains came even as the overall Tokyo market sagged Wednesday, with the benchmark Nikkei 225 down 0.6 percent. Markets were closed Tuesday for a national holiday.

Compared with their U.S. counterparts, Japanese financial institutions have emerged from the subprime crisis relatively unscathed. Conservative lending strategies, as well as lessons learned from Japan's financial crash of the 1990s, are now beginning to pay dividends, analysts say.

Not only are Japanese banks fundamentally healthier, they are flush with cash thanks to nearly $15 trillion in domestic household financial assets.

They are now on the hunt for the growth overseas and well positioned to take advantage of cash-strapped rivals in the U.S.

Nomura did not disclose a price tag for the European deal, but its purchase in Asia was valued at around $225 million, one person familiar with the matter told The Associated Press Monday.

Nomura CEO Kenichi Watanabe called Asian purchase "a once in a generation opportunity" and said the two transactions will help Nomura realize its vision to be a world-class investment bank.

"Our ability to capitalize on this opportunity in spite of such volatile markets reflects our financial strength and demonstrates how well we have managed the credit crisis," Watanabe said in a statement. "This deal is validation for our strategy."

[Associated Press; By TOMOKO A. HOSAKA]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.