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ATAHK reads from Xinhua News that the Nikkei stock index gained 0.23 percent Monday following Wall Street's strong lead on Friday as investors weighed the latest U.S. jobs figures, and robust trade data from China helped the market here shrug off poor domestic growth data. For details, please refer to the following news from Xinhua News on September 8th:
The Nikkei 225 index added 36.43 points to close at 15,705.11, while the broader Topix index of all first-section issues gained 0. 42 percent, or 5.43 points, to finish at 1,298.64.
The much-awaited jobs report on Friday ahead of the Federal Reserve's key meeting this month fell short of expectations, but despite the lackluster data, brokers here said the market got a lift as there would now be more pressure on the Fed to not speed up its massive stimulus tapering.
The U.S. Department of Labor reported on Friday that 142,000 jobs were created in August compared with 209,000 in July. Median economists, however, had expected 230,000 new jobs. In addition, the figures showed that the unemployment rate eased to 6.1 percent in the recording period, from 6.2 percent in July.
"U.S. markets perceive data with optimism and even the bad jobs figures have been interpreted as a likely sign that the Fed won't speed up its stimulus tapering program any time soon," noted Toshihiko Matsuno, a strategist from SMBC Friend Securities.
With Wall Street's rise motivating buying in early trade Monday, as the S&P 500 index closed at a fresh record high, disappointing growth data here failed to dampen investor sentiment, despite a lull following initial purchases and a halt in the yen's depreciation against the dollar also conspiring to turn the market top heavy in later trade.
Similarly, Japan's disappointing GDP data released by the cabinet office this morning, showing the economy shrank an annualized 7.1 percent in April-June from the previous quarter, topping a preliminary estimate, led strategists here to conclude that the Bank of Japan (BOJ) will almost certainly have to unroll further monetary easing measures to underpin the economy that has taken a battering since the April 1 tax hike.
The cabinet office's figures revealed that the revised contraction marked the biggest decline since the January-March quarter in 2009, when firms here felt the full effects of the 2008 global financial crash.
GDP was revised down from a preliminary 6.8 percent drop, the government said, owing largely to a plunge in capital expenditure and consumer spending, both of which can be attributed directly to the April tax increase from five to eight percent this year.
"On the Japan side, the poor GDP revision also leads expectations for more Bank of Japan assistance to keep the economy going and at any rate, the currency market is not being adversely affected by normally depressing news, and thus the impact on the Nikkei is minimal," Matsuno was quoted as saying.
Data from China showing that exports leapt 9.4 percent in August, marking the fifth successive month of on-year growth, with the world's second-largest economy seeing its trade surplus swell to 77.8 percent at a record high at 49.8 billion U.S. dollars, took some of the sting out of Japan's poor economic data, traders here said, and China's exports totaling 208.5 billion U.S. dollars, according to the General Administration of Customs, also added support to the market here Monday, traders added.
The U.S. dollar was changing hands at 105.12 yen in afternoon Tokyo trade, compared to 105.06 yen logged in New York on Friday afternoon and while marginally higher than Friday morning, the exchange rate is still a boon for exporters and their profit and earnings outlooks.
Hence, consumer electronics behemoth Sony edged up 0.07 percent to close at 2,017 yen and heavily-weighted Nikkei issue SoftBank helped buoy the market, advancing 2.14 percent to 7,628 yen, following Chinese online giant Alibaba's listing in the U.S. likely being the biggest in history and the company's valuation potentially making it the third-most valuable IT company, after Google and Facebook.
Its valuation would also place it in the S&P 500's top 5 percent of most valuable companies.
SoftBank, for its part, has a 34 percent stake in Alibaba Group Holdings, the latter of which said Friday it plans to raise a record 24.3 billion U.S. dollars in its share sale
Kobe Steel Ltd. was also in the spotlight Monday, jumping 3.5 percent to 177 yen, following Credit Suisse Group AG increasing its rating on the firm's stock from "neutral" to "outperform."
But while satellite TV company Wowow surged 7.1 percent to 4, 700 yen, as it has the rights to broadcast the U.S. Open men's singles final live on Monday in which Kei Nishikori will take to the court as the first ever Japanese finalist, it was a lousy day for Rakuten
The e-commerce and Internet giant slumped 4.2 percent to 1,270 yen, following reports that it is in talks with Ebates Shopping. com over an acquisition deal, reportedly worth around 950 million U.S. dollars.
Trading volume on Monday dropped to 1.77 billion shares on the Tokyo Exchange's First Section, down from Friday's volume of 2.02 billion shares, with advancing issues outpacing declining ones by 1,272 to 455.
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