Nikkei snaps 6-day losing streak on upbeat Japan GDP, trade worries remain
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Synopsis
Rise in US bond yields following strong US jobs data on Friday, helped financial shares.
By REUTERS
TOKYO: Japan's Nikkei share average snapped a six-day losing streak on Monday after robust revised GDP data countered head winds from trade war worries, with financials leading the gains on rise in US bond yields after strong jobs data.
Japan's second quarter economic growth was revised up to an annualised 3.0 per cent from a preliminary 1.9 per cent thanks to heavy capital spending, marking its fastest growth since 2016.
"Revised GDP figures were stronger than expected, led by capital spending, which is very positive," said Soichiro Monji, senior economist at Daiwa SB Investments.
Rise in US bond yields following strong US jobs data on Friday, helped financial shares.
Insurers were the best performer, gaining 1.73 per cent, with Dai-ichi Life up 2.35 per cent and Japan Post Insurance rising 2.25 per cent.
Still, trade flows were slow, with the market's turnover standing at 1.875 trillion yen, about 30 per cent below the average over the past year, as many investors were wary of possible further escalation in US-led global trade tensions.
US President Donald Trump said on Friday that Tokyo knows it is a big problem if a trade agreement cannot be reached while he also upped the ante on China, threatening duties on virtually all Chinese imports.
Concerns that Trump could target Japanese auto exports weighed on Japanese carmaker shares.
The transport equipment maker index rose just 0.13 per cent from one-year low hit on Friday. Toyota Motor was down 0.03 per cent while Honda Motor fell 0.44 per cent.
"Whether Trump will impose tariffs on all of Chinese imports and on automobiles from a wide range of countries are two most important yardsticks on whether trade disputes become trade wars," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
Semi-conductor related shares suffered big losses for two days in a row following concerns about NAND chip prices and a warning on memory-chip shipments from US KLA-Tenor Corp last week.
Advantest fell 2.41 per cent.
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Japan's Nikkei share average rose 0.30 per cent to 22,373. The broader Topix gained 0.20 per cent to 1,687.6, the first gains in eight sessions, with advancing issues outnumbering declining ones 1,202 to 808.Japan's second quarter economic growth was revised up to an annualised 3.0 per cent from a preliminary 1.9 per cent thanks to heavy capital spending, marking its fastest growth since 2016.
"Revised GDP figures were stronger than expected, led by capital spending, which is very positive," said Soichiro Monji, senior economist at Daiwa SB Investments.
Rise in US bond yields following strong US jobs data on Friday, helped financial shares.
Insurers were the best performer, gaining 1.73 per cent, with Dai-ichi Life up 2.35 per cent and Japan Post Insurance rising 2.25 per cent.
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Still, trade flows were slow, with the market's turnover standing at 1.875 trillion yen, about 30 per cent below the average over the past year, as many investors were wary of possible further escalation in US-led global trade tensions.
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US President Donald Trump said on Friday that Tokyo knows it is a big problem if a trade agreement cannot be reached while he also upped the ante on China, threatening duties on virtually all Chinese imports.
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Concerns that Trump could target Japanese auto exports weighed on Japanese carmaker shares.
The transport equipment maker index rose just 0.13 per cent from one-year low hit on Friday. Toyota Motor was down 0.03 per cent while Honda Motor fell 0.44 per cent.
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"Whether Trump will impose tariffs on all of Chinese imports and on automobiles from a wide range of countries are two most important yardsticks on whether trade disputes become trade wars," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
Semi-conductor related shares suffered big losses for two days in a row following concerns about NAND chip prices and a warning on memory-chip shipments from US KLA-Tenor Corp last week.
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Taiyo Yuden, one of the best performer so far this year, fell 4.05 per cent while Screen Holdings dropped 2.75 per cent.Advantest fell 2.41 per cent.
