ASIA REPORT: Nikkei:8,493.77 (-232.57) Hang Seng:14,555.11 (-285.31) Values at yesterday's close

JAPANESE SHARES bucked the downward trend in Asia yesterday as merger and acquisition activity took the sting off investor nervousness following news that an outbreak of swine flu had spread.

Aozoraand Shinseirose amid reports that the banks, partly owned by foreign private-equity firms, were planning to merge.

Shares in Aozora, 45 per cent owned by Cerberus, closed up 16.1 per cent at ¥137, its biggest one- day gain since November 17th. Shinsei, 32 per cent owned by Christopher Flowers, the buyout specialist, rallied 14.5 per cent to ¥142, its biggest one-day gain since April 2nd.

Kirin Holdingsalso said it would pay $2.4 billion to buy the 53.9 per cent of Australia's Lion Nathan it does not own. The total pay-out of A$12.22 a share is a 47.1 per cent premium compared with last Wednesday's closing price after which trading was halted. Kirin lost 1.6 per cent to ¥1,085.

Also in MA news, it was reported that Mitsui Financialhad gained "exclusive negotiating rights" to acquire Citigroup's Nikko Cordial brokerage and parts of Nikko Citigroup. Mitsui gained 2.6 per cent to ¥3,170. – Copyright 2009 Financial Timesservice