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Tokyo stocks close higher encouraged by upbeat US data

Tokyo stocks closed higher on Monday supported by brisk US jobs growth and manufacturing data that boosted Wall Street.

The benchmark Nikkei 225 index closed up 1.37 percent or 304.59 points at 22,475.94, while the broader Topix index ended the session up 1.46 percent or 25.52 points at 1,774.69.

US President Donald Trump's announcement Friday that he will meet North Korean leader Kim Jong Un on June 12 as scheduled was also supporting the Japanese market, analysts said.

The dollar fetched 109.66 yen in Asian trade, against 109.50 yen in New York.

“With the healthy condition of the US economy confirmed, the US Federal Reserve is certain to hike its policy rate,” said Masayuki Kubota, chief strategist at Rakuten Securities.

“A rate hike is a double-edged sword, as the widening of the interest rate gap would produce a cheaper yen, while an interest rate hike would weigh on global share prices,” he said.

Analysts said financial markets were experiencing “a moderate temperature” with good US jobs numbers balanced by slow salary growth, dampening fears of a faster pace for rate hikes.

For this week, however, uncertainties about the political situation in Italy and Spain, as well as lingering concerns over US protectionist trade policy, could weigh on the market, said Daiwa Securities strategist Tsuyoshi Nomaguchi.

“Investors are seen taking to the sidelines to see the outcome of the summit between Japan and the US” later this week, Yoshihiro Ito, chief strategist at Okasan Online Securities, added.

In Tokyo, Toyota rallied 3.91 percent to 7,401 yen after a brokerage firm upgraded its value-evaluation and the carmaker said it was merging its electronic components production with group firm Denso.

Nintendo tumbled during Monday trade, closing down 6.31 percent to 40,470 yen, after surges last week when it announced plans to introduce its Pokemon series to its Switch console.

Sony closed up 3.04 percent at 5,319 yen and Mitsubishi UFJ Financial ended up 2.44 percent at 682.5 yen.


Posted on: 2018-06-04T13:25:00+05:00
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