Tokyo stocks advanced Thursday, with the key Nikkei stock index climbing 1.44 percent to close at an almost eight-month high, as better-than-expected U.S. jobs data sent the dollar higher against the yen and reinforced investor sentiment that the economic recovery in the U.S. is on track.
Analysts said that investor confidence, already high on recent U.S. macroeconomic data, got a further boost Thursday from a payroll firm showing that U.S. companies went on a hiring spree in December, adding some 300,000 new hires to payrolls across the country.
The figure, as determined by Automatic Data Processing Inc., a private payroll firm, was nearly triple that expected by economists and whilst some investors were marginally skeptical about the data, as the firm's numbers don't always track the official government statistics and because it's difficult isolate seasonal factors in December figures, the news added to hope that Friday's official government report on December's job figures would show positive growth.
"The ADP report was far better than expected and is having a big impact on the market. It triggered weakening of the yen and buying of Tokyo stocks by foreign investors," said one local market analysts.
Brokers added however that having had a dearth of trading cues lately, some investors are already looking ahead to the key corporate earnings reports due out in the U.S. and Japan and other new trading influences, whilst tracking how the U.S. data effects yen-dollar rates.
"Markets will now wait for U.S. payrolls on Friday for confirmation of the strong trend. But investors will then focus more on how the U.S. data will impact the dollar/yen rate," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"Investors have already taken in stride positive news from the U.S. and will now look for new trading factors. After Friday they will immediately shift their focus to the performance of U.S. companies as the earnings season starts next week."
The dollar rose to a three-month high against the yen Wednesday in New York, and hit highs of 83.40 Thursday in Tokyo, the highest level since Dec. 23, following news about the U.S. jobs data.
Subsequently, Japanese exporters with a large exposure to U.S. markets were granted relief as a stronger dollar boosts the value of U.S. revenue at Japanese companies when the funds are repatriated, and helped send the Nikkei to its highest closing level since May 13.
The 225-issue Nikkei Stock Average rose 148.99 points, from Wednesday to 10,529.76, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange advanced 12.82 points, or 1.41 percent, to 924.51.
Toyota Motor climbed 2.6 percent to 3,380 yen and Suzuki Motor jumped 3.5 percent to 2,102 yen. Mazda Motor, meanwhile, gained 2. 1 percent to 247 yen, following a statement on its website saying that the company sold 239,709 vehicles in China last year, an increase of 33 percent from 2009, and that sales for December rose 36 percent from a year earlier to 35,023 units.
Fuji Heavy Industries Ltd. also a carmaker, soared 4.1 percent to 685 yen to book its highest close since October 2006, following Goldman Sachs Group Inc. increasing its rating on the company to " buy" from "neutral."
Major Japanese electronics makers also advanced Thursday as investors snapped up shares still deemed relatively cheap.
"Japanese shares are still undervalued compared with other global peers," said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co.
"We saw strong gains in currency-sensitive shares because of relief that the dollar, which could've fallen below the 80 yen line, has recovered to current levels. That provides a little bit of leeway for corporate earnings as well," Horiuchi said.
Camera maker Nikon Corp. advanced 3.5 percent to 1,818 yen, following a report in the Nikkei newspaper saying the firm expects operating profit from its precision equipment operations will reach 28 billion yen (336.53 million U.S. dollars) in fiscal year 2012, seven times the amount forecast for the current year.
Panasonic Corp. rose 2.5 percent to 1,203 yen on reports the firm is planning an international collaboration for displaying Internet content on television and Toshiba Corp. leapt 3 percent to 474 yen, on news the company may increase capital spending for semiconductors by 10 percent next fiscal year and launch a joint- venture with Korean behemoth Samsung Electronics Co.
But retail shares closed mixed with convenience store operator FamilyMart Co. climbing 2.9 percent to 3,085 yen and internet shopping giant Rakuten Inc. gaining 2.4 percent to 67,400 yen.
Whilst United Arrows Ltd., an apparel chain, hit its best closing high since October 2007 Thursday, rocketing 5.2 percent to 1,330 yen, Fast Retailing Co., Asia's biggest clothing chain, took a nosedive and was the biggest drag on the Nikkei Thursday.
The Owner and operator of the high street Uniqlo budget clothes stores plunged 5.1 percent to 12,400 yen, following the company announcing that sales in Japan-based stores which have been open for at least a year fell 15.5 percent in December from a year earlier with a 10 percent drop in customer traffic.
Trading volume on Thursday increased sharply to 2.39 billion shares on the Tokyo Exchange's First Section, up from Wednesday's volume of 1.73 billion shares, with advancing issues outnumbering declining ones by 1,250 to 302.
Analysts said that investor confidence, already high on recent U.S. macroeconomic data, got a further boost Thursday from a payroll firm showing that U.S. companies went on a hiring spree in December, adding some 300,000 new hires to payrolls across the country.
The figure, as determined by Automatic Data Processing Inc., a private payroll firm, was nearly triple that expected by economists and whilst some investors were marginally skeptical about the data, as the firm's numbers don't always track the official government statistics and because it's difficult isolate seasonal factors in December figures, the news added to hope that Friday's official government report on December's job figures would show positive growth.
"The ADP report was far better than expected and is having a big impact on the market. It triggered weakening of the yen and buying of Tokyo stocks by foreign investors," said one local market analysts.
Brokers added however that having had a dearth of trading cues lately, some investors are already looking ahead to the key corporate earnings reports due out in the U.S. and Japan and other new trading influences, whilst tracking how the U.S. data effects yen-dollar rates.
"Markets will now wait for U.S. payrolls on Friday for confirmation of the strong trend. But investors will then focus more on how the U.S. data will impact the dollar/yen rate," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"Investors have already taken in stride positive news from the U.S. and will now look for new trading factors. After Friday they will immediately shift their focus to the performance of U.S. companies as the earnings season starts next week."
The dollar rose to a three-month high against the yen Wednesday in New York, and hit highs of 83.40 Thursday in Tokyo, the highest level since Dec. 23, following news about the U.S. jobs data.
Subsequently, Japanese exporters with a large exposure to U.S. markets were granted relief as a stronger dollar boosts the value of U.S. revenue at Japanese companies when the funds are repatriated, and helped send the Nikkei to its highest closing level since May 13.
The 225-issue Nikkei Stock Average rose 148.99 points, from Wednesday to 10,529.76, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange advanced 12.82 points, or 1.41 percent, to 924.51.
Toyota Motor climbed 2.6 percent to 3,380 yen and Suzuki Motor jumped 3.5 percent to 2,102 yen. Mazda Motor, meanwhile, gained 2. 1 percent to 247 yen, following a statement on its website saying that the company sold 239,709 vehicles in China last year, an increase of 33 percent from 2009, and that sales for December rose 36 percent from a year earlier to 35,023 units.
Fuji Heavy Industries Ltd. also a carmaker, soared 4.1 percent to 685 yen to book its highest close since October 2006, following Goldman Sachs Group Inc. increasing its rating on the company to " buy" from "neutral."
Major Japanese electronics makers also advanced Thursday as investors snapped up shares still deemed relatively cheap.
"Japanese shares are still undervalued compared with other global peers," said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co.
"We saw strong gains in currency-sensitive shares because of relief that the dollar, which could've fallen below the 80 yen line, has recovered to current levels. That provides a little bit of leeway for corporate earnings as well," Horiuchi said.
Camera maker Nikon Corp. advanced 3.5 percent to 1,818 yen, following a report in the Nikkei newspaper saying the firm expects operating profit from its precision equipment operations will reach 28 billion yen (336.53 million U.S. dollars) in fiscal year 2012, seven times the amount forecast for the current year.
Panasonic Corp. rose 2.5 percent to 1,203 yen on reports the firm is planning an international collaboration for displaying Internet content on television and Toshiba Corp. leapt 3 percent to 474 yen, on news the company may increase capital spending for semiconductors by 10 percent next fiscal year and launch a joint- venture with Korean behemoth Samsung Electronics Co.
But retail shares closed mixed with convenience store operator FamilyMart Co. climbing 2.9 percent to 3,085 yen and internet shopping giant Rakuten Inc. gaining 2.4 percent to 67,400 yen.
Whilst United Arrows Ltd., an apparel chain, hit its best closing high since October 2007 Thursday, rocketing 5.2 percent to 1,330 yen, Fast Retailing Co., Asia's biggest clothing chain, took a nosedive and was the biggest drag on the Nikkei Thursday.
The Owner and operator of the high street Uniqlo budget clothes stores plunged 5.1 percent to 12,400 yen, following the company announcing that sales in Japan-based stores which have been open for at least a year fell 15.5 percent in December from a year earlier with a 10 percent drop in customer traffic.
Trading volume on Thursday increased sharply to 2.39 billion shares on the Tokyo Exchange's First Section, up from Wednesday's volume of 1.73 billion shares, with advancing issues outnumbering declining ones by 1,250 to 302.