Tokyo shares rise on yen’s fall, US budget

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TOKYO: Tokyo shares rose Monday as investors cheered the yen’s weakness as well as a deal on the US budget which, if approved, will avert a government shutdown.

Solid earnings from selected companies also lifted markets, though some investors refrained from making major moves ahead of holidays in Japan.

Stocks opened lower but later rose as the dollar steadily climbed to 111.86 yen from the 111.41 yen seen in New York Friday afternoon.

A weaker yen is positive for Japanese exports as it makes them more competitive overseas, while increasing the value of foreign earnings when repatriated.


The benchmark Nikkei index rose 0.59 percent or 113.78 points to close at 19,310.52. The Topix index of all first-section shares added 0.52 percent or 7.97 points to 1,539.77.

“Earnings reports from exporters have been relatively solid,” Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo, told Bloomberg News.

“But with many companies assuming a foreign-exchange rate of 105 yen per dollar, investors will remain cautious about pushing equities too much higher,” he said.

The greenback got a boost during Asian trading as US congressional leaders reached a deal on a federal spending bill which — if passed by lawmakers this week — will avert a government shutdown.

Congress is expected to vote on the measure, which would keep the government open through September 30.
“It’s good a tentative deal was reached without too much trouble,” Naoki Fujiwara, chief fund manager at Shinkin Asset Management, told Bloomberg News.

But soft economic data from the US and China weighed on overall sentiment, he added, saying: “US data on jobs and the GDP are reason for caution, spurring concern we may be losing the recent solid recovery.”
Some investors also looked warily at continued North Korea-related tensions and Washington’s increasingly tough rhetoric against Pyongyang as a cause for concern.

Japanese markets will be closed for three days starting Wednesday for a string of holidays during which major economic data and global events are expected, including a US Federal Reserve policy meeting and US jobs data.

Tokyo markets will be among the first major ones to open after the second round of the French presidential election on May 7.

Among major shares, Toyota shed earlier losses to rise 0.12 percent to 6,042 yen. Panasonic ended up 0.53 percent at 1,337.5 yen.

Mitsubishi UFJ Financial Group closed up 0.35 percent at 711.7 yen.

Sony jumped 3.03 percent to 3,873 yen after issuing a strong earnings outlook on Friday for the current business year to March 2018.

 

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