Asia report: Japan higher despite SoftBank tumble

The Nikkei 225 closed at a six week high, gaining 1.37% to close at 16,723.31, boosted by a relatively weaker yen.

Tokyo was closed on Monday for a national public holiday.

SoftBank shares were down 10.32% as investors had their first chance to react to Monday’s announcement that it has agreed to acquire British chip maker ARM Holdings in a deal worth £24bn.

Chairman and chief executive of SoftBank, Masayoshi Son, insisted the timing of the bid was not to take advantage of a weaker sterling in the wake of the EU referendum.

Rather, he said it was about taking advantage of a “paradigm shift” in the internet-of-things market.

Analysts were describing the price tag as a bargain for SoftBank, with Amir Anvarzadeh of BGC Securities describing it as a “coup” on CNBC’s Squawk Box.

“It’s probably the best semiconductor-related company in the work.

“They have 95% [smartphone] market share, all of the processes that go into mobile architecture,” Anvarzadeh said.

Peter Milliken at Deutsche Bank disagreed, noting that the deal appeared expensive.

“While ARM appears an excellently positioned business, we fail to see synergies, and consider the 47 times estimated 2016 price-to-earnings to be too rich in a fast-changing sector.”

Deutsche downgraded SoftBank to ‘hold’ from a ‘buy’ rating.

Elsewhere on the Japanese markets, Fanuc was up 1.68% and Fast Retailing gained 3.18% as the market swung higher.

Shares in Nintendo added 14.36% as the popularity of its Pokemon Go smartphone game continued to soar, while social and messaging app Line lost 8.17% after dual listing in New York and Tokyo last week.

The yen was weaker against the greenback for much of the session, though it was choppy towards the close and was last 0.08% stronger at JPY 106.07 per $1.

On the mainland, the Shanghai Composite Index lost 0.24% to 3,036.19, while the Shenzhen Composite added 0.32% to 2,034.45.

South Korea’s Kospi closed down 0.21% at 2,016.89, and Hong Kong’s Hang Seng Index lost 0.6% to finish at 21,673.20.

Oil prices were lower during Asian trading, with Brent crude last down 0.26% at $46.84 per barrel and West Texas Intermediate lsing 0.33% at $45.09.

In Australia, the S&P/ASX 200 lost 0.13% to 5,421.25, with the materials subindex coming under pressure with Rio Tinto releasing its second quarter production results before markets opened.

The miner reported iron ore shipments from the Pilbara increasing 6% year-on-year, while aluminium increased 11% and copper improved by 5%.

Rio said it expects to ship around 330 million tonnes of iron ore from the Pilbara in 2016, subject to weather.

It also said that due to a delay in its autonomous railway system, Pilbara production in 2017 is now expected to be between 330 million adn 340 million.

Shares in the miner finished down 2.29%, with others in the sector following suit - BHP Billiton lost 1.93% and Fortescue Metals closed down 1.46%.

New Zealand stocks hit another record high, with the benchmark S&P/NZX 50 rising 0.7% to 7,154.83, in what analysts described as possible portfolio buying.

The down under dollars were both markedly weaker against the greenback, with the Aussie losing 1.22% to AUD 1.3334 per $1 and the Kiwi retreatng 1.2% to NZD 1.4220.