Japan Nikkei extends gain to third day

Japan stock market finished higher for the third straight session on Wednesday, 1 September 2021, as market participants continued to buy undervalued blue chips after government data showed capital spending by Japanese companies in the April-June quarter grew for the first time in over a year. Investors' sentiment was also buoyed on bets Prime Minister Yoshihide Suga's maneuvering might help restore political stability.

At closing bell, the 225-issue Nikkei Stock Average advanced 361.48 points, or 1.29%, to 28,451.02. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 20.09 points, or 1.02%, to 1,980.79.

The ruling Liberal Democratic Party leadership race, currently scheduled for Sep. 29, has boosted the market as potential candidates drum up performing economic measures against the COVID-19 pandemic fallout,

Media reports suggest Suga intends to dissolve the lower house of parliament in mid-September and is considering holding the general election on October 17. However, Suga said he had no such plan.

Shares of Construction equipment maker Komatsu soared 5.4 percent on reports that Cathie Wood's Ark Autonomous Technology and Robotics ETF has been buying the firm's American depository receipts almost daily since mid-August.

ECONOMIC NEWS: Japan Manufacturing PMI Slows To 52.7 In August - Japan manufacturing sector continued to expand in August, with a manufacturing PMI score of 52.7, the latest report from Jibun Bank showed on Wednesday. That's down from 53.0 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Firms reported slower expansions in both production and incoming business, with the latter increasing at the softest pace since January. Manufacturers often noted that rising COVID-19 cases both domestically and in Southeast Asia had dampened output and demand. As such, new export orders saw a renewed decline, the first since the start of the year.

Capital spending rose in April-June- Capital spending by Japanese companies rose 5.3% in the April-June quarter from a year earlier, the Finance Ministry data showed on Wednesday. Investment by all nonfinancial sectors for purposes such as building factories and adding equipment totaled 10.15 trillion yen. Capital expenditure by manufacturers grew 4% to 3.40 trillion yen. Seasonally adjusted capital expenditure by all nonfinancial sectors, including spending on software, rose 3.2% from the first quarter of 2021.

CURRENCY NEWS: The dollar strengthened to mid 110 yen level in Tokyo trading Wednesday. The dollar stood at 110.40-40 yen, up from 109.81-82 yen at the same time Tuesday. The euro was at 130.32-33 yen, up from 129.88-89 yen.

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