Nikkei Jump 1%, Yen Recovers from a New Low; Factory Output Rebounds, Jobless Rate Holds Steady

Akira Ito
30 Apr, 2024
Tokyo

Market indexes in Tokyo traded higher after investors returned from a three-day weekend as investors digested the latest economic updates. 

Japan's government reported updates on factory output, retail sales, and jobless rates.

The flood of economic data highlighted short-term challenges but confirmed that Japan's economy is likely to rebound in the second quarter after struggling in the first quarter. 

 

Industrial Production Rebounded In March

Seasonally adjusted industrial production increased 3.8% from the previous month, but the unadjusted index from a year ago dropped 6.7%, the ministry of economy, trade, and industry reported Tuesday. 

Industrial production plunged 5.4% in the first quarter from the previous quarter as manufacturing struggled to recover from the earthquake near Tokyo at the beginning of the year.

Shipments increased 4.3% from the previous month and declined 7.1% from a year ago, and inventories rose 1.1% from the previous month but fell 0.9% from a year ago. 

Toyota's suspension of production at its smaller unit, Daihatsu, also negatively impacted production during the period. 

However, March's production rebounded after vehicle production rose 9.6% from the previous month, after Toyota restarted diesel engine production at its subsidiary following a certification scandal in February. 

Electronic parts and accessories production increased 9.2%, and machinery production, including semiconductor equipment, rose 11.6% from the previous quarter. 

The ministry anticipates factory output to increase on a monthly basis by 4.1% in April and by 4.4% in May. 

 

Retail Sales Expanded, Jobless Rate Held Steady 

Overall commercial sales increased 1.7% from a year ago to 53.3 trillion yen, driven by an increase in retail sales of 1.2% to 14.7 trillion yen, the ministry said in a separate report. 

Japan's labor market remained tight in March as employers struggled to find skilled workers; the job-to-applicant ratio edged up to 1.28, the labor ministry said in a note released Tuesday. 

The unemployment rate remained unchanged at 2.6%, the ministry of internal affairs reported Tuesday. 

The Japanese yen was in focus, and the embattled currency rebounded to 156.80 against the U.S. dollar after crossing the 160-mark on the presumed market intervention by Japanese authorities.

The Nikkei 225 Stock Average rose 0.8% to 38,218.36, and the Topix index advanced 1.6% to 2,730.42. 

 

Japan Stock Movers

In stock trading, tech and industrial companies led gainers in heavy trading after the release of economic updates. 

Tokyo Electron, Advantest, Screen Holdings, and SoftBank advanced between 1.5% and 3.5%. 

Toyota Motor, Honda Motor, and Nissan Motor gained between 0.2% and 0.7% after the persistent weakness in the yen raised the prospect of higher earnings in domestic currency. 

Hitachi jumped 8.2% to ¥14,620.0 after the diversified engineering company projected robust growth and a strong shareholder return in the current fiscal year. 

 

Asian Markets Advance 

Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks. 

Market indexes in Mumbai, Seoul, Hong Kong, and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Shanghai.