Tokyo stocks close up 0.57pc at new six-month high

July 29, 2014 - 9:52:32 am

TOKYO: Tokyo stocks rose 0.57 percent to close at a new six-month high on Tuesday, boosted by upbeat expectations for Japanese corporate earnings.

The benchmark Nikkei 225 index climbed 88.67 points to 15,618.07, the best finish since late January, while the Topix index of all first-section issues rose 0.34 percent, or 4.34 points, to 1,290.41.

The Nikkei has been trading in a range of 15,000-15,500 for the past few weeks, but the headline index is breaking out of that band as investors bet on strong corporate earnings, said Shun Maruyama, chief Japan equity strategist at BNP Paribas Securities.

"This isn't a major 'Buy Japan' trade, but corporate earnings have been improving steadily, helped by domestic consumption and capital expenditure," Maruyama said.

"We can anticipate a gradual rising trend," he told Dow Jones Newswires.

Investor fears that an April sales tax hike would dent earnings are "receding", said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

The concern was that consumer demand would plunge in the wake of the April 1 levy hike, and hit producers.

Spending did fall right after the tax rise, but on Tuesday official data showed household spending was down 3.0 percent year-on-year in June, a smaller decrease than the 8.0 percent drop in May and 4.6 percent in April.

In share trading, budget carrier Skymark plunged 13.19 percent to 250 yen as it was locked in tense negotiations with Airbus that could see the cancellation of a $2.2 billion order for six A380 superjumbos.

Automaker Nissan rose 1.84 percent to 1,020.0 yen after it said Monday its latest quarterly net profit soared 37 percent to $1.1 billion.

Honda fell 0.83 percent to 3,548.0 before it announced after the market close that its latest quarterly net profit jumped 19.6 percent on a weak yen as it boosted its full-year profit forecast.

Panasonic inched up 0.08 percent to 1,240.0 yen after the Nikkei business daily reported it had reached a basic agreement with Tesla Motors to participate in a huge battery plant that the American electric vehicle manufacturer plans to build in the United States.

On Wall Street, the Dow rose 0.13 percent, the S&P 500 was a tad higher, and the Nasdaq dipped 0.10 percent.

The dollar was 101.97 yen in midday trade on Tuesday, up from 101.85 yen in New York Monday afternoon. (AFP)