Japan Market ends higher on positive China data

Japan share market finished session firmly in positive territory on Wednesday, 01 March 2023, on the back of yen depreciation against greenback and China's positive economic data, with shares in materials, energy, chipmakers, machinery, and trade companies leading rally.

US market rebounded on Monday, as investors found respite in positive U.S. economic data amid rate-hike worries. Data released on Monday showed U.S. core capital goods orders accelerated in January, while contracts to buy previously owned U.S. homes rose the most in more than 2-1/2 years. At the same time, comments from Federal Reserve Governor Philip Jefferson indicated that inflation in the United States remained "stubbornly high", adding fuel to concerns of further monitory policy tightening.

The 225-issue Nikkei Stock Average index was up 70.97 points, or 0.26%, to finish at 27,516.53. The broader Topix index of all First Section issues on the Tokyo Stock Exchange increased by 4.53 points, or 0.23%, to 1,997.81.

Total 20 of 33 TSE sectors ended higher, with Mining, Iron & Steel, Nonferrous Metals, Wholesale Trade, Oil & Coal Products, and Machinery issues being notable gainers, while Precision Instruments, Marine Transportation, Pharmaceutical, and Retail Trade issues were notable losers.

Shares of machinery and manufacturing sectors advanced, with stocks relatively high exposure to the world's second-largest economy led rally after the release of stronger-than-expected Chinese economic data. Hitachi Construction Machinery soared 4.4% to 3,180 yen and Komatsu advanced 2.9%, to 3,356 yen. Industrial robot makers also rose on the data with Yaskawa Electric jumping 4.3% to 5,590 yen and Fanuc 2.1% ahead at 23,655 yen.

Chip related shares advanced on tracking gains in US semiconductor equipment maker Applied Materials after the company unveiled Monday high-performing machines that can be produced at a lower cost. Chip-manufacturing equipment maker Tokyo Electron rose 1.8% to 47,570 yen, and chip-testing equipment maker Advantest gained 2.3% to 11,060 yen.

ECONOMIC NEWS: The manufacturing sector in Japan continued to contract in February, and at a faster rate, the latest survey from Jibun Bank revealed on Wednesday with a PMI score of 47.7. That's down from 48.9, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. The lower reading of the headline index was partly the result of a sharper decrease in new orders. Sales fell for the eighth month running, and at the fastest pace since July 2020. Firms commented that orders were dampened by weaknesses in domestic and global economic conditions. Export orders also fell at a steeper rate that was the fastest for 31 months and meant that foreign demand for Japanese manufactured goods had fallen consistently for a year. Production levels fell for the eighth consecutive month in February.

CURRENCY NEWS: The dollar fetched 136.37 yen in Asian trade, against 136.13 yen in New York on Tuesday.

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