Japan Stocks Extend Gains; Manufacturing Contraction Slows but Service Expansion Accelerates

Akira Ito
23 Apr, 2024
Tokyo

Stocks in Tokyo advanced for the second day in a row amid easing tensions in the Middle East, and investors reviewed the latest update on the manufacturing industry. 

The Nikkei 225 Stock Average rose 0.5% to 37,607.78, and the Topix index advanced 0.2% to 2,668.53. 

Moreover, the Japanese yen dropped to a new 34-year low of 154.85, prompting another verbal intervention from Finance Minister Shunichi Suzuki. 

Most traders in Tokyo are looking for the yen to drop as low as 170 before the government steps up currency market intervention.  

The au Jibun Bank Japan Manufacturing Purchasing Manager's Index increased to 49.9 in April from 48.2 in March, S&P Global reported Tuesday. 

Manufacturing activities contracted for the eleventh month in a row but fell at the slowest pace in April. 

The rising cost of inputs forced the average selling price to increase at the fastest pace in nine months. 

The au Jibun Bank flash Japan Services Purchasing Manager's Index increased to 54.6 in April from a final 54.1 in the previous month, S&P Global reported Tuesday. 

The service sector expanded for the 20th consecutive month and at the strongest pace since May 2023. 

The market in Asia advanced for the second consecutive day this week, tracking gains in overnight trading on Wall Street. 

Benchmark indexes in Seoul rose 0.1%, and in Sydney they advanced 0.4%. 

The market index in Shanghai declined 0.4%, but the reference index in Hong Kong advanced 0.6% following an increase of 1.8% in the previous session. 

In Tokyo stock trading, tech stocks led the decliners, with Advantest, Tokyo Electron, and Screen Holdings falling between 0.5% and 1.5%. 

SoftBank fell 0.3% to ¥7,490.0, and Uniqlo parent Fast Retailing jumped 1.6% to ¥42,120.0. 

Financial stocks led gainers ahead of the Bank of Japan's monetary policy decisions on Friday. 

Sumitomo Mitsui Financial, Mitsubishi UFJ Financial, and Mizuho Financial gained between 0.2% and 0.6%. 

Among the leading automakers, Toyota Motor decreased ¥3,510.0, Honda Motor declined 0.6% to ¥1,763.0, and Nissan Motor rose 0.07% to ¥550.80. 

Honda Motor is nearing an agreement with the Canadian government to set up an electric vehicle manufacturing plant, according to Nikkei. 

Honda is likely to invest as much as C$14 billion over the years and manufacture electric batteries at a plant, following the lead of other automakers, Volkswagen and Stellantis.