Japan’s Nikkei share average rose to a near eight-year high on Monday, helped by Wall Street’s gains, while investors digested weaker-than-expected domestic growth data.
The Nikkei rose 0.8 per cent to 18,031.84 points at midday, after reaching as high as 18,074.26 earlier, the highest level since July 2007.
Japan’s economy rebounded from recession in the final quarter of last year but the growth was weaker than expected as household and corporate spending disappointed, underlining the challenge premier Shinzo Abe faces in shaking off decades of stagnation.
Though the annualised 2.2 per cent expansion in October-December was smaller than a 3.7 per cent increase forecast in a Reuters poll, stock market investors stayed optimistic about consumption going forward.
“Although the figure was weaker than expected, the data showed that Japan’s economy is recovering steadily,’’ said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
“Sentiment is upbeat this year because what’s different from last year is that we don’t have a tax hike so consumer confidence should stay strong.’’ ‘
Sectors sensitive to domestic demand rose such as financial and real estate sectors.
Mitsubishi UFJ Financial Group gained 3.3 per cent, Sumitomo Mitsui Financial Group advanced 3.6 per cent and Mitsubishi Estate Co rose 1.2 per cent.
Insurance shares also outperformed, with Dai-ichi Life Insurance Co rising 2.2 per cent and T&D Holdings soaring 4.1 per cent.
Index heavyweight Fanuc Corp gained 3.8 per cent and contributed a hefty 32 positive gains to the Nikkei benchmark after it said that it will spend about ¥100 billion to expand the output capacity of core products in Japan.
The broader Topix gained 0.8 per cent to 1,460.95, with 28 of its 33 subsectors in positive territory. The JPX-Nikkei Index 400 advanced 0.8 per cent to 13,246.29.