The broader Topix index of all issues on the first section of the tokyo Stock Exchange was up 8.98 points at 1,516.00. "High-priced market leaders like Softbank and Sony came under a correction but the overall market remains upbeat," said Okasan Securities Co. Ltd. Chief strategist Tetsuya Ishijima. "With New York share prices staying at high levels, the Tokyo market is pointed upwards," he said, citing other positive factors as stable dollar-yen rates and net purchases by foreign investors.

Turnover on the major board totalled 618.56 million shares, somewhat sluggish ahead of a public holiday on Tuesday, compared with Friday's 943.80 million shares. The market was alsoboosted by remarks on Sunday by Taichi Sakaiya, the state minister for economic planning, that Japan needs a second extra budget in the current year to March 2000.

Meanwhile, the Hang Seng dropped 0.7 per cent on lingering worries over tensions across the Taiwan Strait. "The market is still affected by the uncertainties between China and Taiwan," said Howard Gorges, vice-president of South China Brokerage, adding investors were closely following the verbal duel between the two sides.

Hong Kong blu-chips were generally firmer and the index was mainly dragged down by China-related shares, including China Telecom, he said. South Korean shares closed barely higher in volatile trade after fears of a rise in call rates wiped out gains made on news of Daewoo Group's restructuring drive, dealers said.