Japan Nikkei strengthens on Wall Street gains, upbeat China growth data

Headline indices of the Japan share market closed higher on Wednesday, 17 April 2019, as risk appetite buying bolstered on tracking rallies on Wall Street overnight and weaker yen against the U.S. dollar. Meanwhile, better-than-expected Japan trade data and China economic growth data for March 2019 also underpinned markets. Total 21 issues out of 33 subsectors of the Tokyo Stock Exchange inclined, with shares in Securities & Commodities Futures, Marine Transportation, Transportation Equipment, Banks, and Oil & Coal Products issues being notable gainers, whereas Fishery, Agriculture & Forestry, Electric Power & Gas, and Information & Communication issues were notable losers. At closing bell, the 225-issue Nikkei Stock Average inclined 66.21 points, or 0.3%, at 22,287.87. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 5.08 points, or 0.31%, at 1,631.54.

China reported better-than-expected economic growth data, fuelling hopes of a recovery in its economy amid concerns of a global growth slowdown. China's economy grew 6.4% in the first quarter from a year earlier, official data showed on Wednesday steady from the previous quarter helped by sharply higher factory production.

The major exporters were higher on a weaker yen. Canon rose more than 1%, Sony added 0.6%, Mitsubishi Electric was higher by 0.4% and Panasonic rose 0.2%. In the tech sector, Advantest jumped more than 3% and Tokyo Electron gained more than 1%. Among the major automakers, Honda was up 1% and Toyota was higher by more than 1%.

Shares of Nippon Paint Holdings declined more than 3% after the Japanese paint company made a A$3.8 billion acquisition proposal for Australian paint and homeware company DuluxGroup.

SoftBank Group Corp was down 2% on news that the U.S. Justice Department has concerns about the structure of a proposed $26 billion merger of T-Mobile US Inc and SoftBank's Sprint Corp.

Omron Corp surged 5% after Nidec Corp said it would buy Omron's automotive electronics unit for about 100 billion yen.

In economic news, the Ministry of Finance said that Japan posted a merchandise trade surplus of 528.5 billion yen in March 2019, up from 334.9 billion yen in February. Exports were down 2.4% on year, following the 1.2% drop in the previous month. Imports were up 1.1% on year following the 6.6% contraction a month earlier.

Japan's goods trade balance fell into the red in fiscal 2018 for the first time in three years amid higher energy prices and sluggish demand from China, government data showed Wednesday. Japan logged a deficit of 1.59 trillion yen ($14.2 billion) in the year through March, according to a preliminary report by the Finance Ministry. Exports rose 1.9% from a year earlier to 80.71 trillion yen on increasing deliveries of cars and ships, while imports jumped 7.1% to 82.29 trillion yen on higher costs of crude oil and liquefied natural gas. Japan's deficit with China, one of its biggest trading partners, expanded for the first time in three years to 3.58 trillion yen. Exports grew 2.9% while imports rose 3.5%. With the United States, Japan recorded a surplus of 6.53 trillion yen as exports were up 2.9% and imports climbed 11.2%. With the European Union, a trade deficit of 421.7 billion yen was recorded, staying in the red for the seventh straight year. Imports hit a record-high 9.69 trillion yen.

CURRENCY NEWS: The Japanese yen depreciated around the 112 against the dollar on Wednesday, as a string of robust economic data boosted demand for riskier assets. The dollar was quoted at 111.99-112.00 yen compared with 111.96-112.06 yen in New York and 111.89-90 yen on Tuesday in Tokyo.

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