Upbeat global economic data sets Nikkei on positive start to 2017
TOKYO : Japan’s Nikkei share average started the first trading day of 2017 on a positive note as investors took heart from upbeat global economic data which came out during Japan’s holidays. A weaker yen boosted exporters. The Nikkei surged 2 percent to 19,489.86 in midmorning trade. The benchmark index had dropped 0.2 percent to 19,114.37 on the last trading day of last year, its lowest closing level since Dec. 9.While Japanese markets were closed for New Year holidays, the dollar surged and U.S. stocks took confidence from strong U.S. factory activity which accelerated to a two-year high on a surge in new orders. The dollar powered to a near three-week peak of 118.605 yen overnight before coming down 0.2 percent to 118.06 in Asian trade.
“The foreign exchange rate and expectations for U.S. economic growth are serving as a tailwind for Japanese equities,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.
Sato added that Japanese stocks will likely be supported by hopes that a weaker yen will lift exporters’ earnings until this fiscal year ending March, with the Nikkei’s upside seen around 20,000-21,000 points. Additional gains later in the year would depend on whether U.S. president-elect Donald Trump’s campaign-trail promises are will realised or not, he said.
All of 33 Topix’s subsectors were in positive territory, with exporters and banking stocks outperforming. The broader Topix rose 2.1 percent to 1,550.97 and the JPX-Nikkei Index 400 added 2.2 percent to 13,909.81.
Toyota Motor Corp surged 2.8 percent, Honda Motor Co jumped 4.2 percent and Panasonic Corp soared 2.5 percent. Mitsubishi UFJ Financial Group gained 4.0 percent and Mizuho Financial Group rose 2.9 percent. Meanwhile, Sharp Corp jumped more than 10 percent after Sakai Display, an LCD panel joint venture between Sharp and Hon Hai Precision Industry said that it will build a 61 billion yuan ($ 8.8 billion) factory in China to produce liquid-crystal displays (LCDs).
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