Comments
Japanese stocks rose in choppy trade on Wednesday morning after the market digested stronger-than-expected GDP data that initially seemed unlikely to support further stimulus or the delay of a consumption tax hike, both widely expected by the market.
The Nikkei share average rose 0.6 per cent to 16,750.73 in late morning trade.
Japan GDP data
Fresh data showed Japan’s economy expanded at the fastest pace in a year in the first quarter thanks to a consumption boost from the leap year, rebounding from the previous quarter’s contraction and beating median market forecasts.
“The market’s initial reaction to the GDP data was a slight strengthening of the yen,” said Stefan Worrall, director of Japan equity sales at Credit Suisse.
“Japanese policy makers could really use a sense of crisis to help justify ramping up fiscal stimulus or pushing out the VAT (sales tax) hike and a stronger GDP figure seems to undermine that narrative, though there is also some buoyancy from stronger US inflation and increased expectations for Fed rate hikes.”
Weaker yen
The yen resumed its weakening trend in mid-morning after investors digested the GDP data and focused instead on the US data.
“Taking into account the effects of the extra day from the leap year, which pushed up the quarter-on-quarter growth rate by 0.3 percentage point, growth is not as strong as the headline number shows,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
Shares of home appliance and electronics exporter Panasonic Corp climbed 2 per cent in late morning trade, while tyre exporter Bridgestone Corp gained 1.1 per cent.
Mitsubishi Motors Corp rose 1.7 per cent after announcing the company president, Tetsuro Aikawa, would step down over the fuel economy rigging scandal that erupted in April.
The Topix subindex for iron and steel added 0.9 per cent after Japan’s steel companies shrugged off new anti-dumping duties imposed by the US on Japanese and Chinese imports of cold-rolled flat steel, primarily used for automotive manufacturing, appliances and construction.
The US found producers in both countries were selling the products at unfair prices but Japan’s 71.35 per cent duty was significantly less than the 265.79 per cent duty imposed on China.
The broader Topix climbed 0.8 per cent to 1,346.50 with all but two of its 33 subindexes in positive territory.
The JPX-Nikkei Index 400 rose 0.8 per cent to 12,180.44.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.