Japan Market bounces on bargain hunting

Headline indices of the Japan share market closed higher on Tuesday, 24 July 2018, as investors chased for bargain hunting on yen depreciation against greenback, reports the Bank of Japan is debating changes to monetary policy settings, and further signs of a shift by China toward monetary expansion. However, market gain was capped after Nikkei Manufacturing PMI early in the day that saw business conditions in Japan's manufacturing sector decline from 53.0 to 51.6. Among TSE33 issues, 28 issues inclined, while 5 declined, with shares of Iron & Steel, Machinery, Nonferrous Metals, Real Estate, Construction, Metal Products, and Marine Transportation issues being notable gainers, while Foods, Pharmaceutical, and Air Transportation issues were notable losers. The benchmark Nikkei 225 index inclined 0.51%, or 113.49 points, to 22,510.48. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, rose 0.47%, or 8.16 points, to 1,746.86.

The manufacturing sector in Japan continued to expand in July, albeit at a slower pace, the latest flash survey from Markit/Nikkei revealed on Tuesday with a 20-month low manufacturing PMI score of 51.6. That's down from 53.0 in June, although it remains above the boom-or-bust line of 50- that separates expansion from contraction. The flash index for new orders fell to 50.1 from a final 52.7 in June to reach the lowest since September 2016.

Shares of exporters closed higher on bargain buying after steep losses the previous day. Honda Motor Co, robot manufacturer Fanuc Corp, and machine tool maker DMG Mori Co gained in a range of 1.3% to 2.5%.

Showa Shell Sekiyu shares advanced after the oil refiner raised its net profit forecast for the first half of 2018 to 46 billion yen from the previous 26 billion yen, amid a rise in crude oil prices during the period.

Surveying equipment maker Ono Sokki shares jumped as the company raised its operating profit forecast for the year through December 2018 to 1.05 billion yen from 900 million yen.

KOA Corporation shares sank after the electronic components maker's operating profit for the second quarter fell by 3.4 per cent to 1.18 billion yen, weighed by personnel costs and depreciation expenses.

CURRENCY NEWS: The Japanese yen depreciated against U.S. dollar on Tuesday after US Treasury yields rose on expectations the Federal Reserve would persist with its rate hikes this year. The dollar was quoted at 111.46-47 yen compared with 111.28-38 yen in New York and 110.96-97 yen in Tokyo on Monday.

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