Japan Stocks gain on hopes for U.S. stimulus

Japan share market finished session higher on Monday, 28 December 2020, on positive sentiment after U.S. President Donald Trump signed a $2.3 trillion spending package. However, market gains capped after data showed that Japan's industrial output stalled in November and as the country detected cases of the new strain of the virus.

At closing bell, the 225-issue Nikkei Stock Average advanced 197.42 points, or 0.74%, to 26,854.03. The broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 9.636 points, or 0.54%, to 1,788.04.

US President Donald Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a partial federal government shutdown.

 

Japan on Saturday said it would temporarily ban non-resident foreign nationals from entering the country as it tightens its borders following the detection of a new, highly infectious variant of the coronavirus. The ban will take effect from Dec. 28 and will run through January, the government said in an emailed statement. Japanese citizens and foreign residents will be allowed to enter but must show proof of a negative coronavirus test 72 hours before departing for Japan and must quarantine for two weeks after arrival, the statement said. Tokyo reported a record 949 new coronavirus cases on Saturday as authorities urged residents to stay home.

In economic news, Japan industrial output was flat on a seasonally adjusted basis in November, the Ministry of Economy, Trade and Industry said on Monday, following the 4.0 percent gain in October. On a yearly basis, industrial production sank 3.4 percent, following the 3.0 percent drop in the previous month. Upon the release of the data, the METI maintained its assessment of industrial production, saying that it is picking up. Industries that increased included production machinery, business-oriented machinery and iron and steel. These were offset by declines among motor vehicles, chemicals and plastic products. Shipments were down 0.9 percent on month and 3.9 percent on year, while inventories fell 1.1 percent on month and 8.7 percent on year. The inventory ratio slipped 1.8 percent on month and 1.2 percent on year. According to the METI's forecast of industrial production, output is expected to sink 1.1 percent in December and then spike 7.1 percent in January.

CURRENCY NEWS: The Japanese yen traded at 103.46 per dollar after seeing levels below 103.4 against the greenback last week.

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