BUSINESS Tokyo stocks close higher on upbeat overseas economic data

BUSINESS

Tokyo stocks close higher on upbeat overseas economic data

Xinhua

18:35, May 24, 2021

TOKYO, May 24 (Xinhua) -- Tokyo stocks closed higher Monday with issues sensitive to global economic trends advancing following robust economic data from the United States and Europe.

The 225-issue Nikkei Stock Average added 46.78 points, or 0.17 percent, from Friday to close the day at 28,364.61.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 8.35 points, or 0.44 percent, to finish at 1,913.04.

Local traders said that investors cheered upbeat data signaling a global economic recovery from the downside effects of the novel coronavirus pandemic, specifically improving U.S. factory activity which sent the Dow Jones Industrial Average higher on Friday.

They highlighted data firm IHS Markit reported its flash U.S. manufacturing PMI increased to 61.5 in the first half of May, marking the highest reading since October 2009.

The reading beat median economists' forecasts and came on the heels of a final reading of 60.5 in April.

Market strategists also said that data from Europe also added to an upbeat mood with the IHS Markit composite PMI rising from 60.7 a month earlier to 62.0, the highest since comparable data became available.

The initial flash composite PMI for the eurozone, meanwhile, climbed to 56.9 compared to April's 53.8, strategists here also noted.

"Investors had a renewed view on global economic growth after the rise on the Dow on Friday, which is why shippers and car makers were strong," Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities, was quoted as saying.

"But this trend may not continue for long as there are many uncertainties ahead of us. If the economy grows fast, then there will be possibilities for tapering, which would push stock markets down," Arisawa added.

Sentiment was also underpinned by Japan opening two mass vaccination centers in Tokyo and Osaka on Monday.

The move comes as the government here tries to speed up its sluggish vaccination program, the slowest among advanced countries with just 4 percent of its 126 million population having received their first jabs, analysts here highlighted.

"Expectations grew that Japan's vaccination rate will catch up," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

In terms of the U.S. dollar-yen pairing, the dollar was quoted at 108.76-77 yen at 5 p.m. compared with 108.91-109.01 yen in New York and 108.69-70 yen at 5 p.m. on Friday in Tokyo.

The euro, meanwhile, fetched 1.2196-2198 dollars and 132.65-69 yen against 1.2177-2187 dollars and 132.67-77 yen in New York and 1.2216-2218 dollars and 132.78-82 yen in late Friday afternoon trade in Tokyo.

By the close of play, marine transportation, air transportation and mining issues comprised those that gained the most, and issues that rose outpaced those that fell by 1,394 to 715 on the First Section, while 83 ended the day unchanged.

Issues finding favor on hopes for the global economic recovery included steelmakers, with JFE Holdings rising 1.2 percent, while Kobe Steel ended the day 2.2 percent higher.

Shipping firms also gained on expectations of increased demand, with Mitsui O.S.K. Lines climbing 4.6 percent, Nippon Yusen jumping 5.6 percent, while Kawasaki Kisen soared 7.6 percent.

But some retailers bucked the upward trend as despite the government's attempts to speed up its vaccination rollout, and Japan's COVID-19 state of emergency being expanded to cover Okinawa in Japan's south, while new daily COVID-19 infections continue to ravage Osaka Prefecture, concerns about patronage and the emergency period being extended weighed, brokers said.

As such, department store operators Isetan Mitsukoshi Holdings dropped 1.3 percent, J.Front Retailing lost 2 percent, while Marui Group closed 2.3 percent lower.

On the main section on Monday, 993.83 million shares changed hands, dropping from Friday's volume of 1,037.96 million shares.

The turnover on the first trading day of the week came to 2,150.49 billion yen (19.74 billion U.S. dollars).

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