UPDATE1: Nikkei posts 4-month closing high amid global growth hopes

Japan Economic Newswire |

Tokyo stocks advanced Monday in a worldwide market rally, with the Nikkei ending at its highest since early December amid hopes for global economic growth on robust U.S. earnings and strong data from China.

The 225-issue Nikkei Stock Average ended up 298.55 points, or 1.37 percent, from Friday at 22,169.11, the highest close since last Dec.3, when it finished at 22,574.76. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 22.53 points, or 1.40 percent, higher at 1,627.93.

Every industry category gained ground, led by mining, insurance and machinery issues.

The Nikkei topped 22,000 immediately after opening, encouraged by gains in U.S. shares late last week due to a solid rise in financial giant JP Morgan on its better-than-expected results.

The market also welcomed data released Friday that showed a rebound in Chinese exports in March at a faster pace than expected.

"Following the recent solid Chinese data, expectations grew that the (country's) economy has bottomed out and the recovery would spill over to the global economy," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., said "the (Tokyo) market caught up with global equities gains as a risk-on mood strengthened," adding that Tokyo shares have lagged counterparts elsewhere.

He said market players had stepped up their buying of stocks while selling bonds, due to central banks in the United States and the eurozone shifting away from tighter monetary policies.

Still, participants were cautious about bulk-buying stocks ahead of two-day Japan-U.S. trade talks in Washington from Monday, and full-year earnings reports from Japanese companies later this month.

Investors were concerned about the possibility of a strengthening yen that would hurt exporters, as U.S. Treasury Secretary Steven Mnuchin said Saturday he will seek the inclusion -- in any trade deal with Japan -- of a provision to prevent currency devaluations aimed at gaining a competitive advantage.

On the First Section, advancing issues outnumbered decliners 1,910 to 190, while 41 ended unchanged.

Global economic optimism pushed up cyclical stocks. SoftBank Group climbed 350 yen, or 3.1 percent, to 11,825 yen, Fanuc gained 540 yen, or 2.6 percent, to 21,580 yen, and Mitsubishi UFJ Financial Group rose 8.2 yen, or 1.5 percent, to 563.50 yen.

Suzuki, on the other hand, lost 115 yen, or 2.3 percent, to 4,834 yen, after the automaker said it will book around 80 billion yen ($714 million) in special losses for the business year ended last month, due to a domestic recall of 2 million vehicles affected by improper product inspections.

Trading volume on the main section rose to 1,225.62 million shares from Friday's 1,101.78 million shares.


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