Japan Nikkei rebounds on bargain hunting

Japan share market finished volatile session higher on Monday, 13 December 2021, recouping the losses in the previous two sessions, as investors chased for bargain hunting on tracking positive lead from Wall Street late last week. Meanwhile, market risk sentiments boosted up further on better than expected Japan Core Machine Orders data and the Bank of Japan's quarterly Tankan Survey of business sentiment data.

However, market gains capped as investors refrained from chasing the upside ahead of the Fed meeting as well as a Bank of Japan policy meeting later this week.

At closing bell, the 225-issue Nikkei Stock Average advanced 202.72 points, or 0.71%, to 28,640.49. The broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 2.65 points, or 0.13%, to 1,978.13.

Total 19 of 33 Topix industry groups ended up, with top performing issues were Marine Transportation (up 2.5%), Insurance (up 1.4%), Other Financial Business (up 0.9%), Rubber Products (up 0.8%), Machinery (up 0.6%), and Chemicals (up 0.5%), while bottom performing sectors included Transportation Equipment (down 1.2%), Real Estate (down 0.9%), Services (down 0.8%), Textiles & Apparels (down 0.6%), and Oil & Coal Products (down 0.4%).

Shares of tech issues were higher following gains in their U.S. counterparts last Friday. Advantest added 2.4%, Murata Manufacturing climbed 1.5%, and Screen Holdings was up 1.3%.

Toyota Motor sank 2.4%, after the automaker said Friday it would partially suspend operations of more domestic lines in December due to supply chain disruptions in Southeast Asia.

ECONOMIC NEWS: Japan core machine orders was up a seasonally adjusted 3.8% on month in October, the Cabinet Office said on Monday, coming in at 879.8 billion yen, following the flat reading in September. On a yearly basis, core machine orders rose 2.9% following the 12.5% jump in the previous month. For the fourth quarter of 2021, core machine orders are predicted to rise 3.1% both on quarter and on year.

Also, Japan's headline index gauging big manufacturers' sentiment stood at plus 18 in the final quarter of 2021, unchanged from the previous quarter, the Bank of Japan's (BOJ) tankan survey showed on Monday. By contrast, big non-manufacturers' sentiment improved for the sixth straight quarter at plus 9, up from plus 2 in September. The index hit the highest level since December 2019, as the Sept. 30 lifting of state of emergency curbs to combat the COVID-19 pandemic boosted morale among retailers. Japan's service-sector mood improved to a two-year high but the recovery among manufacturers stalled, the central bank survey showed, a sign rising raw material costs was weighing on the economy's recovery from the pandemic. Meanwhile, big firms expect conditions to worsen ahead as high fuel prices and a weak yen push up import costs, reinforcing expectations Japan will maintain massive fiscal and monetary support to underpin a fragile economy. CURRENCY NEWS: The Japanese yen changed hands at 113.56 per dollar, weakening from an earlier level around 113.25.

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