Japan Market extends gain to third day

Japan share market finished higher for third straight session on Wednesday, 03 February 2021,as appetite for riskier assets supported by gains on Wall Street overnight and yen depreciation to lower 105 level against greenback. Meanwhile, better than expected corporate earnings and forecasts from domestic companies also supported buying momentum.

At closing bell, the 225-issue Nikkei Stock Average advanced 284.33 points, or 1%, to 28,646.50. The broader Topix index of all First Section issues on the Tokyo Stock Exchange increased by 24.0 points, or 1.3%, to 1,871.09.

Shares of export related companies continued upward journey, thanks to yen depreciation which helped exporters to improves overseas profits when repatriated. Among exporters, Toyota climbed 4.4% to 7,782 yen. Panasonic rallied 3.8% to 1,434.5 yen after it revised up full-year profit forecasts, while Denso rallied 3.9% to 6,601 yen after the auto parts maker revised up its full-year profit forecasts.

Sony Corp shares jumped 1.6% to 10,635 yen ahead of its earnings report. After the market close, Sony said its profits for the nine-month period grew and it revised up its full-year sales forecast.

ECONOMIC NEWS: Japan Services PMI Contracts Further In January - Japan services sector continued to contract in January, with a services PMI score of 46.1, the latest survey from Jibun Bank revealed on Wednesday. That beat expectations for 45.7 and it down from 47.7 in December - so it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. This extended the current sequence of contraction to 12 months, with the latest reduction the fastest since May. Panel members highlighted that the resurgence in COVID-19 infections and the introduction of a state of emergency to allow new restrictions designed to curb the spread of infections caused the fall in new work. Moreover, international demand for Japanese services deteriorated further. Nonetheless, business expectations for the next 12 months remained positive in January. Firms commonly attributed confidence to hopes of an end to the pandemic, which they hope will stimulate both domestic and international demand. The survey also showed that the composite index fell to 47.1 from 48.5 in December.

CURRENCY NEWS: The Japanese yen traded at 105.02 per dollar, still weaker than levels below 104 against the greenback seen last week.

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