The Japanese stock market opened on a strong note Wednesday, tracking a positive lead from Wall Street where stocks extended gains overnight amid optimism about further stimulus. A weak yen and some encouraging corporate news too contributed to the bright start.
Steel, non-ferrous metals, real estate, automobile, financial and precision instruments stocks are mostly up with strong gains. Electric power, communications, chemicals and oil stocks are also trading higher.
The benchmark Nikkei 225 index, which rose to 8,957 after opening with a strong positive gap, is currently trading at 8,940, up 136.7 points or 1.5 percent from its previous close.
Mitsui Mining & Smelting shares are up 8.5 percent. Sumco Corp is trading 6.2 percent up, Mitsumi Electric is adding 5.5 percent and Advantest Corp (ATE) is up with a gain of 5.2 percent.
Pacific Metals, JFE Holdings, Nippon Light Metal, Kansai Electric Power, Toho Zinc, Kawasaki Heavy Industries, Nippon Electric Glass, Okuma Corp, Mitsui OSK Lines, Sharp Corp, Kobe Steel, Japan Steel Works and Heiwa Real Estate are all trading higher by 4 to 5 percent.
Nippon Paper Group, Sojitz Corp, Dowa Holdings, Nippon Paper Group, Alps Electric, Nippon Soda and Nippon Steel Corp are up more than 3 percent.
Bank stocks Aozora Bank, Chiba Bank, Mitsubishi UFJ Financial (MTU) and Shizuoka Bank are up 1 to 3 percent.
In the automobile space, Hino Motors, Honda Motor (HMC), Mazda Motor and Suzuki Motor are up 2 to 3 percent. Mitsubishi Motor, Nissan Motor and Toyota Motor (TM, TYT.L) are trading higher by 1.2 to 1.6 percent.
Among prominent losers, Pioneer Corp is down by about 7 percent following a weak earnings outlook, Dainippon Screen Manufacturing is losing 3.5 percent, Daikin Industries is down 2.2 percent and Nippon Sheet Glass is losing 1.8 percent.
Sapporo Holdings, Sony Financial Holdings, Dai Nippon Printing, NTT Docomo and Toho Co are also trading weak.
On the economic front, Japan saw a current account surplus of 433.3 billion yen in June, the Ministry of Finance said on Wednesday - down 19.6 percent on year. That topped forecasts for a surplus of 415.4 billion yen and a 24.9 percent annual contraction after showing a surplus of 215.1 billion and a 62.6 percent plunge in May.
The trade balance reflected a surplus of 112.0 billion yen, down 13.7 percent on year. That missed expectations for a surplus of 114.9 billion yen following the downwardly revised shortfall of 941.0 billion yen in the previous month (originally -848.2 billion yen).
Meanwhile, bank lending in Japan was up 1.0 percent on year at 396.424 trillion yen in July, the Bank of Japan said. That beat forecasts for an increase of 0.8 percent, which would have been unchanged from the June reading.
Including trusts, bank lending was up an annual 0.7 percent after shedding a downwardly revised 0.6 percent in the previous month. Lending from foreign banks in Japan plummeted an annual 22.4 percent to 2.163 trillion yen after plunging 20.6 percent on year a month earlier.
In the currency market, the U.S. dollar traded in the upper 78 yen range in early deals in Tokyo. The yen is currently trading at 78.55 to the dollar.
Among other markets in the Asia-Pacific region, Australia, South Korea and Taiwan are trading notably higher, while Shanghai, Hong Kong, Malaysia, Singapore and New Zealand are up marginally. Markets across the region had mostly ended notably higher on Tuesday.
On Wall Street, stocks ended higher on Tuesday, extending the upward move seen over the course of the two previous sessions, amid renewed optimism about the possibility of further monetary stimulus.
The Dow rose 51.1 points or 0.4 percent to 13,168.6, the Nasdaq jumped 26 points or 0.9 percent to 3,015.9 and the S&P 500 advanced 7.1 points or 0.5 percent at 1,401.4.
Major European markets too closed higher on Tuesday. While the French CAC 40 index moved up 1.5 percent, the German DAX index and the U.K.'s FTSE 100 index gained 0.7 percent and 0.6 percent, respectively.
U.S. crude oil extended gains for a third straight day to end at a two-month high on Tuesday, with investors opting for riskier assets. Crude for September delivery gained $1.21 or 1.6 percent to close at $93.67 a barrel on the New York Mercantile Exchange, after scaling a high of $94.42 a barrel intraday.
by RTT Staff Writer
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