Japan Indexes Inch Higher After Manufacturing Sentiment Improved

Akira Ito
01 Jul, 2024
Tokyo

Stock market indexes in Tokyo advanced in Monday's trading, the yen continued its slide, and the yield on Japanese government bonds stayed above 1%. 

The Nikkei 225 and the Topix indexes advanced after confidence among large companies rose in the second quarter, indicating rising activity. 

Market sentiment was positive in Monday's trading, and the Topix index jumped to a new intra-day record high. 

However, foreign investors have been lowering their exposure to Japanese stocks amid a faltering pace of improvement in corporate governance, a mixed economic outlook, and the persistent yen weakness. 

The Nikkei 225 index rose in the first half by 19%, sharply lower than the 27% increase at the end of the second quarter. 

Most foreign investors are anticipating the Nikkei index to face significant headwinds in the third quarter as the Bank of Japan lets the yen sink to a new low in the year. 

 

Tankan Survey Shows Improved Manufacturing Sentiment

The Bank of Japan's Tankan index of sentiment among large manufacturers in the second quarter increased to plus 13 from plus 11 in the previous quarter. 

The sentiment among manufacturers of textiles increased to 22 from 11 in the first quarter, petroleum and coal products to 17 from 9, and chemical products to 10 from 2. 

Meanwhile, sentiment among makers of iron and steel weakened to zero from 16 in the first quarter, food and beverages to 21 from 24, and production machinery to 11 from 17. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 0.1% to 39,631.06, and the Topix index rose 0.5% to 2,824.28. 

Tech stocks faced selling pressure in Monday's trading, and Tokyo Electron, Screen Holdings, and Advantest declined around 0.5%. 

Softbank gained 1.1% to ¥10,505.0. 

Sumitomo Mitsui gained 2.5%, Mitsubishi UFJ jumped 1.1% to ¥1,749.0, and Mizuho Financial increased 1.5% to ¥3,408.0. 

J. Front Retailing soared 17% to ¥1,924.50 after the retailer reported a surge in earnings following strong demand from foreign tourists. 

Takashimaya advanced 11.4% to ¥3,007.0 in the hopes of higher earnings after the J. Front results.