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Japanese Market Advances

The Japanese stock market is advancing for the fifth straight day on Thursday following the overnight rally on Wall Street and on optimism about a state of emergency being lifted in western Japan later today. Investors shrugged off weaker than expected Japanese economic data.

The benchmark Nikkei 225 Index is adding 85.75 points or 0.42 percent to 20,680.90, after touching a high of 20,734.91 in early trades. Japanese shares rose to a fresh two-and-a-half month high on Wednesday.

Market heavyweight SoftBank Group is declining almost 1 percent, while Fast Retailing is advancing 1 percent.

The major exporters are mostly higher on a slightly weaker yen. Sony is advancing almost 2 percent, Panasonic is higher by more than 1 percent and Mitsubishi Electric is edging up 0.1 percent, while Canon is down 0.5 percent.

In the tech space, Advantest is adding 0.6 percent and Tokyo Electron is up 0.2 percent. Among automakers, Honda Motor is rising 0.4 percent and Toyota is edging down 0.1 percent.

In the oil sector, Inpex is gaining more than 3 percent and Japan Petroleum is higher by almost 2 percent after crude oil prices rose to a ten-week high overnight.

Among the other major gainers, Taiheiyo Cement is gaining more than 11 percent, Sompo Holdings is rising more than 5 percent and Furukawa Electric is higher by more than 4 percent.

On the flip side, Amada Co. is losing almost 3 percent and Bandai Namco Holdings is lower by more than 2 percent.

In economic news, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in May, and at a faster pace, with a manufacturing PMI score of 31.7. That's down from 34.7 in April and it moves further beneath the boom or bust line of 50 that separates expansion from contraction.

Japan posted a merchandise trade deficit of 930.401 billion yen in April. That missed expectations for a shortfall of 560 billion yen following the 4.9 billion yen surplus in March.

Exports plummeted 21.9 percent on year, which actually beat expectations for a fall of 22.7 percent following the 11.7 percent decline in the previous month. Imports were down an annual 7.2 percent versus expectations for a drop of 12.9 percent after slipping 5.0 percent a month earlier.

In the currency market, the U.S. dollar is trading in the upper 107 yen-range on Thursday.

On Wall Street, stocks closed sharply higher on Wednesday, partly reflecting continued optimism about an economic recovery as states begin to reopen following the coronavirus-induced lockdowns. Early indications suggest the states that have reopened have not seen a spike in coronavirus cases, which has led to hopes the economy may rebound more quickly than many economists predict. Meanwhile, traders largely shrugged off a report raising doubts about Moderna's potential coronavirus vaccine.

The Dow jumped 369.04 points or 1.5 percent to 24,575.90, the Nasdaq spiked 190.67 points or 2.1 percent to 9,375.78 and the S&P 500 surged up 48.67 points or 1.7 percent to 2,971.61.

The major European markets also moved to the upside on Wednesday. While the German DAX Index surged up by 1.3 percent, the U.K.'s FTSE 100 Index jumped by 1.1 percent and the French CAC 40 Index advanced by 0.9 percent.

Crude oil prices settled at a ten-week high on Wednesday after data showed a drop in crude stockpiles, and amid optimism about a pick-up in energy demand thanks to reopening of businesses in several parts across the globe. WTI crude for July gained $1.53, or about 4.8 percent, at $33.49 a barrel, the highest close since March 10.

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