Japan Nikkei rebounds on bargain hunting

The Japan share market closed sharp higher on Wednesday, 05 June 2019, as investors chased for bottom fishing after hitting a five-month intraday low yesterday. Meanwhile, positive lead from Wall Street overnight and halt in yen appreciation also aided risk sentiments. All of the Topix's 33 subsectors were in positive territory, with machinery, metal product and marine transportation-linked issues being notable gainers. At closing bell, the 225-issue Nikkei Stock Average surged 1.8%, or 367.56 points, to 20,776.10, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew 2.07%, or 30.99 points, at 1,530.08.

Investors risk sentiments underpinned after U.S. Federal Reserve Chairman Jerome Powell signalled a possible rate cut if the economy required in a boost to riskier assets. Powell said the central bank would act "as appropriate" to address trade war risks a day after St. Louis Fed chief James Bullard said a rate cut may be warranted soon. Powell said the Fed was "closely monitoring the implications" of a trade dispute that has disrupted global markets.

Machinery makers and automakers inclined, with Fanuc Corp up 3.2%, Yaskawa Electric Corp 4.7%, Advantest Corp 3.8% and Toyota Motor Corp 2.3%.

Banks and insurers were also higher. Mitsubishi UFJ Financial Group rose 2% and Dai-ichi Life Holdings rallied 3.1%.

SoftBank Group Corp inclined nearly 3% after forecasting to book around 1.2 trillion yen in pre-tax profit on the sale of shares in China'sAlibaba Group Holding.

Bucking the trend, Fast Retailing declined after the company said that its same-store sales at its Uniqlo clothing outlets in Japan fell 1.8% in may on the year.

ECONOMIC NEWS: Japan Nikkei Services PMI Slows To 51.7 In May -- Japan services sector continued to expand in May, with a services PMI score of 51.7, the latest survey from Nikkei revealed on Wednesday. That's down marginally from 51.8 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Individually, there was an upturn in services activity amid resilient demand. Employment rose at a solid pace, while businesses maintained an optimistic outlook. The survey also said that Nikkei's composite index eased to a reading of 50.7 in May, down from 50.8 in the previous month.

CURRENCY NEWS: Japanese yen was little changed against greenback on Wednesday, as investor confidence for risk assets returned after U.S. Federal Reserve officials hinted that interests rates would be cut if the economy required. The dollar was quoted at 108.24-25 yen, compared with 108.10-20 yen in New York and 108.04-06 yen on Tuesday in Tokyo.

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