Japan Stocks climb on upbeat offshore lead, industrial production data

Japan shares advanced on Wednesday, 16 December 2020, with the 225-issue Nikkei Stock Average and broader Topix index settling higher, as market sentiment was buoyed by signs of progress in negotiations over an economic relief package in the United States as well as the vaccination rollout. Meanwhile, better than expected industrial production data for November also provoked buying sentiments.

At closing bell, the 225-issue Nikkei Stock Average advanced 69.56 points, or 0.26%, to 26,757.40. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 4.78 points, or 0.27%, to 1,786.63.

Japanese shares started with rallies following gains in all three key indexes overnight on Wall Street on enthusiasm that U.S. lawmakers may be closer to a stimulus deal and progress in the rollout of COVID-19 vaccines. Meanwhile, better than expected trade surplus and industrial production data for November also provoked buying sentiments.

ECONOMIC NEWS: US Industrial Production Climbs 0.4% In November- US industrial production climbed by 0.4% in November following a downwardly revised 0.9% advance in October, the Federal Reserve reported on Tuesday. The Fed said manufacturing output increased for the seventh straight month, advancing by 0.8% in November amid a 5.3% spike in motor vehicles and parts production. The report also showed a substantial rebound in mining output, which surged up by 2.3% in November after falling by 0.7% in October. On the other hand, utilities output plunged by 4.3% in November after jumping by 1.8% in October, as warmer than usual temperatures reduced the demand for heating. The Fed noted that industrial production has rebounded to about 5% below its pre-pandemic levels after having plummeted by 16.5% between February and April.

Japan Manufacturing PMI Continues To Contract In November- Japan manufacturing sector continued to contract in November, with a manufacturing PMI score of 49.7, the latest survey from Jibun Bank revealed on Wednesday. That's up from 49.0. although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, employment levels among Japanese manufacturers rose for the first time since February, albeit fractionally. Business sentiment eased to its softest pace since August, although optimism remained robust. In survey also showed that the services PMI slipped to 47.2 in November from 47.8 and the composite PMI fell to 48.0 from 48.1.

CURRENCY NEWS: The Japanese yen traded at 103.40 per dollar, having seen levels around 104.1 against the greenback yesterday.

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