Japan Market climbs to fresh three-and-half-months high

Japan share market advanced to a fresh three-and-half-month high on Monday, 08 June 2020, as investor sentiments remained bullish on following the U.S. market's big advance last Friday after a surprise increase in U.S. employment. Meanwhile, the safe-haven yen depreciation against greenback and other major currencies also boosted export-oriented stocks.

At closing bell, the 225-issue Nikkei Stock Average jumped 314.37 points, or 1.37%, to end at 23,178.10, its first finish above the psychologically important threshold since Feb. 21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange advanced 18.24 points, or 1.13%, at 1,630.72, with all but three of the 33 sector sub-indexes finishing higher.

 

The Tokyo market opened sharply higher on broad-based buying prompted by substantial rises in all major U.S. stock indexes on Friday, fuelled by the U.S. Labor Department's announcement that nonfarm payrolls rose while the jobless rate dropped in the United States in May. The U.S. Bureau of Labor Statistics said the U.S. regained 2.5 million jobs in May and the unemployment rate fell to 13.3%.

Shares of blue-chip exporters were in demand, as a softer yen boosts Japanese manufacturers' profits made abroad when repatriated. Automaker Toyota, technology and entertainment giant Sony and other export-oriented issues rose due to the weaker yen. Chipmaking gear manufacturer Tokyo Electron, test device maker Advantest and other issues in the semiconductor sector advanced on tracking their U.S. peers' vigorous performances.

Oil stocks including JXTG and Idemistu were higher thanks to the upbeat crude oil market. Crude-oil futures were up after the Organization of the Petroleum Exporting Countries (OPEC), Russia and allied nations agreed Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July.

Meanwhile, beverage maker Ito En dived after revising down its consolidated operating profit estimate for the year that ended in April. Also on the negative side were daily goods producer Kao and drugmaker Chugai.

ECONOMIC NEWS: Japan Current Account Surplus Down Y262.7 Billion In April- Japan had a current account surplus of 262.7 billion yen in April, the Ministry of Finance said on Monday, down 84.2% on year, following the 1,917.0 billion yen surplus in March. The trade balance reflected a deficit of 966.5 billion yen following the 103.1 billion yen surplus in the previous month. Exports were down 23% on year at 4,909.0 trillion yen, while imports sank an annual 9.5% to 5,875.6 trillion yen. The capital account showed a deficit of 11.4 billion yen, while the financial account saw a shortfall of 949.0 billion yen.

CURRENCY: The safe-haven yen weakened, with the Japanese yen was trading at 109.44 per dollar after weakening drastically from levels below 108.5 last week, reflecting continued confidence in the revival of the global economy.

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