Tokyo: Japan's Nikkei share average advanced on Monday after Greek lawmakers approved a highly unpopular austerity bill in return for a second bailout from the European Union and International Monetary Fund to avoid a chaotic default.
Softbank Corp surged 3.4 percent in heavy volume after the Nikkei business daily said it was the leading candidate to receive the high speed frequency 900MHz band that four mobile operators are competing for.
The Nikkei was up 0.2 percent at 8,963.48 by the midday break, with its 200-day moving average near 9,055 acting as resistance.
"We have seen pretty decent flow today. We were skewed to buying," a sales trader at a foreign bank said, adding that domestic investors were selling, which curbed the market.
"Japan rarely gets this reaction right. If Europe starts to come in later in the afternoon around 2 p.m. and Europeans feel a little bit more buoyant of the implication of this (Greek vote), you could easily see the market rally into the close."
The broader Topix was flat at 778.89. Volume on the main board after the morning session was 65 percent of its full daily average for the past 90 days.
The benchmark Nikkei is up 6 percent so far this year, boosted by a brightening outlook for the US economy and an injection of 489 billion euros in three-year loans by the European Central Bank.
Shoji Hirakawa, chief strategist at UBS, was upbeat on the market.
"I recommend the exporters, especially the high tech sector, and also the high beta and low price-to-book ratio (stocks). A typical sector would be financial sector," he said, adding that investors should sell defensive stocks.
Hirakawa said the market had discounted Japan's economy shrinking a bigger-than-expected 0.6 percent in October-December.
"The key point is not this quarter's growth, last quarter's growth but next fiscal year's growth from April. The Diet passed a supplementary budget in November," he said, referring to planned reconstruction after last March's massive earthquake and tsunami.
Sumitomo Mitsui Financial Group added 0.5 percent and Mitsuibishi UFJ Financial Group put on 0.3 percent.
Fanuc Ltd rose 2.1 percent, reversing two sessions of losses, after a report that the industrial robot maker plans to build a new factory near Tokyo to double its domestic output capacity of machine tools that produce smartphone parts by the end of the year.
Nomura analysts added electric appliances & precision instruments and steel & nonferrous metals to their long candidate list, citing receding concerns of a global recession.
"We are now long the (electric appliances & precision instruments) sector as we expect it to outperform based on its strong correlation with market sentiment," they said in a note.
But some investors were wary of a pullback after hefty gains since the start of the year.
The Nikkei volatility index added 0.9 percent to a two-week high on Monday, indicating wariness among market players. The higher the volatility index, the lower the risk appetite.