Japanese Market Notably Higher

The Japanese stock market is notably higher on Monday following the record closing highs on Wall Street Friday after data showed a modest rebound in U.S. employment in the month of January and amid rising optimism about U.S. stimulus.

Investor sentiment was also buoyed by news that Japan will consider lifting its coronavirus state of emergency in some prefectures as a new law that allows fines for social distancing violations goes into effect Saturday.

The benchmark Nikkei 225 Index is advancing 613.44 points or 2.13 percent to 29,392.63. Japanese shares ended sharply higher on Friday.

Market heavyweight SoftBank Group is gaining more than 5 percent and Fast Retailing is advancing more than 1 percent. In the tech space, Advantest is rising almost 3 percent and Tokyo Electron is higher by more than 2 percent.

In the banking sector, Sumitomo Mitsui Financial is higher by more than 3 percent and Mitsubishi UFJ Financial is rising more than 2 percent. Among automakers, Toyota and Honda are advancing more than 1 percent each.

The major exporters are mostly higher. Panasonic and Mitsubishi Electric are gaining more than 3 percent each, while Canon is up more than 1 percent. Sony is declining more than 1 percent.

Among the other major gainers, Kobe Steel is gaining more than 11 percent, Unitika is rising more than 9 percent and Nippon Steel is higher by almost 9 percent.

Conversely, AGC Inc. is losing almost 3 percent and Suzuki Motor is lower by more than 2 percent.

On the economic front, the Ministry of Finance said Japan had a current account surplus of 1,165.6 billion yen in December, up 113.9 percent on year. That beat expectations for a surplus of 1,040 billion yen following the 1,878.4 billion yen surplus in the previous month.

Exports were up 0.3 percent on year to 6,561.5 billion yen after sinking 3.4 percent in November. Imports fell an annual 13.5 percent to 5,596.4 billion yen after dropping 13.6 percent in the previous month.

Japan’s trade surplus was 965.1 billion yen, up from 616.1 billion yen a month earlier.

The Bank of Japan said that overall bank lending in Japan was up 6.1 percent on year in January, coming in at 578.083 trillion yen. That’s down from 6.2 percent in December.

In the currency market, the U.S. dollar is trading in the mid 105 yen-range on Monday.

On Wall Street, stocks closed higher on Friday, with the Nasdaq and the S&P 500 once again reaching new record closing highs after the Labor Department report released a closely watched report showing a modest rebound in employment in the month of January. The markets continued to benefit from upbeat news on the earnings front and news that Johnson & Johnson has applied for an emergency use authorization from the FDA for its single-dose coronavirus vaccine.

The Dow rose 92.38 points or 0.3 percent to 31,148.24, the Nasdaq advanced 78.55 points or 0.6 percent to 13,856.30 and the S&P 500 climbed 15.09 points or 0.4 percent to 3,886.83.

The major European markets turned in a mixed performance on Friday. While the French CAC 40 Index advanced by 0.8 percent, the German DAX Index closed just below the unchanged line and the U.K.’s FTSE 100 Index edged down by 0.2 percent.

Crude oil prices moved higher on Friday on hopes energy demand will increase thanks the vaccination drive picking up momentum, and on output cuts by the oil cartel. WTI crude oil futures for March ended higher by $0.62 or about 1.1 percent at $56.85 a barrel.

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