Japan Market gains on upbeat offshore lead

Japan stock market finished session higher on Monday, 26 July 2021, after a 4-day weekend that marked the opening of Tokyo Olympics. Market gains propelled up on bargain buying across a broad range of sectors, thanks to upbeat offshore lead. However, market gains capped after release of weaker than expected Preliminary factory and service activity surveys for July.

At closing bell, the 225-issue Nikkei Stock Average advanced 285.29 points, or 1.04%, to 27,833.29. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 21.21 points, or 1.11%, to 1,925.62. Japanese markets were closed Thursday and Friday for national holidays.

 

Trading volume turnover in the 1st section decreased to 966 million shares from 1,086 million shares in previous session. Trading value turnover decreased to 2,249.27 billion yen from 2,394.16 billion yen in previous session.

Total 31 of 33 sectors sub-indexes on the Tokyo exchange ended higher, with top performing sectors were Iron & Steel (up 3.6%), Textiles & Apparels (up 3.2%), Marine Transportation (up 2.5%), Nonferrous Metals (up 2.2%), Machinery (up 2.2%), and Mining (up 2.1%).

Shares of chip-related issues were up on tracking gains in the Nasdaq. Advantest rose 1.1% to 9,270 yen, Screen Holdings climbed 1.9% to 9,550 yen, and Taiyo Yuden was up 3.3% to 5,380 yen.

Toray Industries shares gained 5.2% to 716.3 yen, on reports that the chemical fiber manufacturer's operating profit nearly tripled in the first quarter through June from a year earlier.

ECONOMIC NEWS: Japan Manufacturing PMI Weakens In July- Japan manufacturing sector continued to expand in July, with a manufacturing PMI score of 52.2, the latest survey from Jibun Bank revealed on Monday. That's down from 52.4, although it remains above the boom-or-but line of 50 that separates expansion from contraction. Both output and new order growth eased to six-month lows in the latest survey period amid rising COVID-19 cases and ongoing delays in receiving raw materials. Manufacturers also noted that demand for staff eased in July, with the rate of job creation the softest since April. Nonetheless, positive sentiment remained strong overall, despite easing slightly from June.

The survey also showed that the services PMI fell to 46.4 from 47.2 in June, while the composite index slipped to 47.7 from 48.9. New business inflows also reduced further, extending the current sequence of decline to one-and-a-half years as continued restrictions on movement and businesses hampered activity. Moreover, employment saw a renewed contraction as demand fell, with job shedding being reported for the first time since December 2020.

CURRENCY NEWS: The Japanese yen traded at 110.18 per dollar, weaker than levels below 110 seen against the greenback last week.

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