Japan Nikkei extends gain on stimulus hopes

Headline indices of the Japan share market advanced to a 5-1/2-week high on Monday, 09 September 2019, as risk sentiment bolstered on tracking a strong session on Wall Street last Friday, optimism for Sino-US trade talks, and on growing hopes for a further stimulus to support growth in the world's major economies. Around late afternoon, the 225-issue Nikkei Stock Average advanced 102.47 points, or 0.5%, to 21,302.04, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 10.70 points, or 0.7%, at 1,547.80.

Total 32 sectors out of 33 sectors of Topix index inclined, with Other Financial Business, Nonferrous Metals, Insurance, Oil & Coal Products, Retail Trade, and Marine Transportation issues being notable gainers..

Investors returned to the market after with positive note on Monday, 09 September 2019, on expectations that the world's major economies would further loose monetary policies to support growth.

Slower-than-expected payroll growth in August hinted at a slowing U.S. economy, helping cement expectations of an interest rate cut by the Federal Reserve later this month. Federal Reserve Board Chairman Jerome Powell said Friday that the central bank would continue to act "as appropriate" to sustain economic expansion in the world's biggest economy.

China's central bank said on Friday it would slash the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan ($126.35 billion) in liquidity to shore up an economy slowed by the Sino-US trade conflict. There are also expectations that the European Central Bank would cut interest rates on Thursday.

Shares of banks and financials rallied, buoyed by growing speculation of further consolidation in the industry after SBI Holdings and Shimane Bank announced a capital tie-up plan on Friday. Tsukuba Bank jumped 4.6% and Fukushima Bank rose 2.2%, while Shimane Bank, which soared by daily limit of 16.4% in the previous session, shed 3%. SBI Holdings gained 1%.

Shares of Japanese automaker Nissan slipped more than 0.2% following reports that company Chief Executive Hiroto Saikawa has expressed his desire to resign, following an admission last week to being improperly compensated.

ECONOMIC NEWS: Japan's gross domestic product (GDP) grew an annualized 1.3% in the April to June quarter, weaker than the preliminary reading for 1.8% annualized growth, due to a downgrading in capital expenditure, according to revised data from the Cabinet Office on Monday. The growth in real GDP, the total value of goods and services produced in the country adjusted for inflation, corresponds to a 0.3% increase from the previous quarter, compared with a preliminary reading for a 0.4% gain, according to the Cabinet Office. Capital expenditure edged up 0.2% from the previous quarter, worsening from the preliminary reading of 1.5%. .

Japan Posts Y1,999.9 Billion Current Account Surplus In July - Japan had a current account surplus of 1,999.9 billion in July, the Ministry of Finance said on Monday down 1.3 percent on year, up from 1,211.2 billion yen in June. The trade balance showed a deficit of 74.5 billion yen, down from the 759.3 billion yen surplus in the previous month. The capital account showed a deficit of 79.7 billion yen following the 58.5 billion yen shortfall a month earlier.

CURRENCY NEWS: The Japanese yen depreciated against greenback on Monday, as demand for safe haven currency reduced on expectation of stimulus measures from major economies to support ailing economic growth. The Japanese yen, often seen as a safe-haven currency in times of turmoil, traded at 106.92 against the dollar after weakening from levels below 106.0 in the previous week.

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