Around the World's Markets: Tokyo

THE BENCHMARK Nikkei index rose to a three-month high closing up 134.30 points, or 0.9 per cent, at 15,207.77.

The IMF predicts Japan's economy will shrink almost 3 per cent this year and that it will not expand at all in 1999. The index closed above 15,000 for the third consecutive day, buoyed by strong buying by overseas investors keen not to miss a potential rally. Pulp and papermakers gained the most as investors looked for the next merger candidate.Drugmakers rose 1.4 per cent.