Roundup: Japan's Nikkei closes at 4-month high, U.S. inflation data in focus-Xinhua

Roundup: Japan's Nikkei closes at 4-month high, U.S. inflation data in focus

Source: Xinhua| 2022-08-08 17:47:45|Editor: huaxia

TOKYO, Aug. 8 (Xinhua) -- Japan's benchmark Nikkei stock index closed on Monday at its highest level in more than four months as stocks reporting solid earnings and the yen's retreat against the U.S. dollar attracted buying. Gains were capped, however, by tech issues dragging and jitters over upcoming U.S. inflation data.

The 225-issue Nikkei Stock Average added 73.37 points, or 0.26 percent, from Friday to close the day at 28,249.24, marking its highest closing level since March 29.

The broader Topix index, meanwhile, gained 4.24 points, or 0.22 percent, to finish at 1,951.41.

Dealers here said that solid earnings reports lifted investor sentiment with exporters finding favor on the yen's retreat versus the U.S. dollar.

"The market was supported by a weaker yen and investors continued to buy shares of firms that have reported strong earnings so far such as Lasertec," Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co., was quoted as saying.

Strategists here added that the solid jobs data was not enough for some investors to make hard bets however, and some opted to refrain from bold moves ahead of the release later this week of U.S. inflation data, likely to inform the U.S. Federal Reserve's next rate hike.

The U.S. economy created 528,000 non-farm jobs in July, with the unemployment rate dropping to a pre-pandemic low of 3.5 percent, brokers here highlighted, although said investors' reactions were not straightforward.

"Wall Street had a mixed reaction to the payroll data so it is hard for investors to make an active bet in Japan. They are awaiting the U.S. CPI data before making any active bets," said Takatoshi Itoshima, a strategist at Pictet Asset Management Japan.

Investment analysts said that expectations are continuing for more aggressive policy tightening by the Fed to tame inflation, with a hike of 0.75 percentage point now expected, higher than the previous consensus of a 0.50 percentage point increase.

This, as uncertainty remains about the health of the U.S. economy amid increasing inflation and on a domestic level, the widening interest rate gap between the Fed and the Bank of Japan (BOJ), the central bank here continues with its ultra-loose monetary policy, analysts explained.

The tech-heavy U.S. Nasdaq losing ground at the end of last week saw their Japanese peers retreat, capping overall gains today, they added.

By the close of play, mining, oil and coal product, and metal product issues comprised those that gained the most, and issue that rose outpaced those that fell by 894 to 867 on the Prime Market, while 77 ended the day unchanged.

Exporters advancing on the yen's retreat included Subaru accelerating 1.3 percent, while Hino Motors gained 1.2 percent.

Suzuki Motor surged 10.4 percent, after announcing an almost 37 percent increase in quarterly operating profit, while Bandai Namco jumped 4.1 percent, after the game maker lifted its half-year profit forecast.

Tokyo Electron helped buoy the broader market on hopes for solid gains after the closing bell, adding 1.7 percent, while Canon leaped 4.6 percent after announcing another share buyback plan.

Semiconductor equipment manufacturer Lasertec soared 9.5 percent, after announcing its net profit in the fiscal year to June leaped 29.1 percent.

But tech-oriented issues followed their U.S. peers lower, with TDK and Murata Manufacturing both retreating 0.7 percent, while Screen Holdings shed 0.5 percent by the close.

On the Prime Market on Monday, 1,123.35 million shares changed hands, rising from Friday's volume of 1,212.46 million shares.

The turnover on the first trading day of the week came to 2,709.01 billion yen (20.04 billion U.S. dollars).