Headline indices of the Japan share market mildly advanced on Friday 23 August 2019, as risk sentiments bolstered on hopes of Bank of Japan (BOJ) easing measures after dismal Japanese inflation data. Although, market gains were capped, amid escalation in tensions between Japan and South Korea after Seoul cancelling an intelligence-sharing pact with Tokyo and on caution ahead of a speech by U. S. Federal Reserve Chairman Jerome Powell later in the day that might provide clues about further rate cuts by the Fed. Around late afternoon, the 225-issue Nikkei Stock Average rose 75.29 points, or 0.37%, to 20,703.30, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange added 3.84 points, or 0.26%, at 1,501.90.
Total 25 sub-indexes out of 33 sub-indexes of Topix index industry category retreated into positive territory, with Pulp & Paper, Iron & Steel, Marine Transportation, Securities & Commodities Futures, and Retail Trade issues being notable gainers, while Mining, Precision Instruments, Oil & Coal Products, and Information & Communication issues were notable losers.
Japan's core consumer price index (CPI), which includes oil products but excludes fresh food prices, rose 0.6% in July year-on-year, as expected, matching the previous month's gain, which was the slowest pace since July 2017. Back then, the core CPI had climbed by 0.5%.
The data will likely add to the pressure on the BOJ to ease further.
Tensions between Japan and South Korea escalated on Thursday after Seoul said it was cancelling an intelligence-sharing pact with Tokyo amid a bitter trade dispute. The arrangement was designed to share information on the threat posed by North Korea and its missile and nuclear activities.
Market participants remain keenly focused on this weekend's Economic Symposium in Jackson Hole after the Federal Reserve released the July FOMC Minutes that continue the dovish tone which started to grip the central bank earlier this year. Investors will look for clues about what the U. S. central bank would do next.
ECONOMIC NEWS: The Ministry of Internal Affairs and Communications said that overall nationwide inflation in Japan was up 0.5% on year in July, down from 0.7% in June. Core consumer prices, which exclude volatile food prices, gained an annual 0.6% - unchanged from the previous month.
CURRENCY NEWS: The yen, a gauge of risk sentiment due to its perceived status as a safe haven, depreciated on Friday. The Japanese yen traded at 106.55 versus the greenback, weakening fractionally from an earlier level around 106.36.
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