Tokyo stocks close up 0.18pc

July 30, 2014 - 9:33:29 am

TOKYO: Tokyo stocks closed 0.18 percent higher on Wednesday, boosted by a weak yen and largely upbeat Japanese corporate earnings, as investors shrugged off a weak lead from Wall Street.

The benchmark Nikkei 225 index edged up to a new six-month high, gaining 28.16 points to 15,646.23. The Topix index of all first-section issues went up 0.14 percent, or 1.83 points, to 1,292.24.

Budget airline Skymark was the stand-out loser, sinking nearly 14 percent in reaction to news that plane maker Airbus had cancelled a deal with the firm worth more than $2 billion.

Currency rates were favourable for Japanese exporters, with the dollar hovering near three-week highs against the yen. A weaker yen lifts their profitability.

The dollar was buying 102.11 yen in Tokyo, slightly down from 102.13 in New York Tuesday afternoon, but still higher from levels in Tokyo earlier Tuesday.

Investors were looking to Japanese shares with Wall Street appearing overheated, analysts said.

"A gradual upward trend (in Japanese stocks) is likely to continue," said Tomohiro Okawa, equity strategist at UBS Securities Japan. "Valuations on Japanese stocks are still relatively cheap.

"European economies aren't great. The US market is too strong. Because the Chinese economy is steady, neighbouring (Asian) markets are faring okay, benefiting Japan," he added.

US shares suffered a sell-off as Washington and Europe announced fresh economic restrictions on Russia for its support of rebels in Ukraine who have been accused of shooting down a Malaysian passenger jet this month.

The Dow fell 0.42 percent, the S&P 500 lost 0.45 percent and the Nasdaq edged down 0.05 percent.

Skymark plummeted 13.60 percent to 216 yen after Airbus said it has cancelled a $2.2 billion deal, reportedly over concerns about payment.

The losses add to the 13 percent dive Tuesday when the airline said it was negotiating with Airbus to "revise" the order of six A380 superjumbos signed three years ago.

Automaker Honda rose 3.10 percent to 3,658.0 yen after it boosted its annual profit forecasts Tuesday and said quarterly net profit was up 19.6 percent thanks to a weak yen and growth in global auto sales.

Toyota gained 0.13 percent to 6,141.0 yen after it announced the group's worldwide sales in the first half of 2014 grew 3.8 percent to a record 5.09 million units.

Japan Airlines lost 3.54 percent to 5,710 yen after it said its April-June net profit fell 19.4 percent as a weak yen and soaring fuel costs dug into its results.

There was little market reaction to official data showing Japan's factory output in June fell more than expected, hit largely by a drop-off in cars and industrial machines. (AFP)