Japan’s Nikkei and Asian stocks

Japan’s Nikkei and Asian stocks

Japan’s Nikkei closed higher on Monday in a range-bound trading session, matching advances on Wall Street and other Asian equities markets, albeit losses in chip-related stocks weighed on the index.

After dipping as much as 0.3 percent earlier in the session, the Nikkei share average (NI225) rose 0.25 percent to settle at 27,736.47. The Topix (TOPIX) rose 0.48 percent to 1,953.63 points.

Over the weekend, advances in the U.S. market aided the Japanese market while U.S. futures maintained their momentum. The monthly jobs data suggested a solid labor market, likely to keep the Federal Reserve on pace to retain its hawkish policy position. Wall Street climbed marginally on Friday. Shipping companies (M.T.) led advances in Japan, rising 2.85%, followed by oil explorers (IMING.T), which jumped 2.64 percent.

The stock of Zojirushi (7965) rose 4.99 percent as the company reported higher quarterly profits.

Tokyo Electron (8035), a chip-making equipment producer, weighed the most on the Nikkei, sliding 2.66 percent overnight, matching a drop in the Philadelphia Semiconductor index (SOX). Advantest (6857) and Kyocera (6971), respectively, fell 1.26 percent and 0.47 percent.

As the number of new Covid-19 infections has begun to rise, railways (IRAIL.T) and airlines (AT) were among the poorest sectors, falling 0.74 percent and 1.66 percent, respectively.

The market was rebuilt into three new markets on Monday. The exchange adopted stricter listing standards to attract more overseas investors.

Chinese Tech Stocks

On Monday, the Hang Seng index in Hong Kong led advances among major Asia-Pacific markets as Chinese technology stocks in the city surged.

The Hang Seng index rose 2.1 percent to 22,502.31, with Tencent shares rising 2.96 percent. Other Chinese I.T. stocks surged, with Alibaba up 3.65% and NetEase up 6.62%.

Meanwhile, Carrie Lam, the city’s chief executive, declared that she would not seek re-election to a second term. This week, mainland China’s markets are closed for the holidays on Monday and Tuesday.

Japan’s Nikkei 225 oscillated between positive and negative territory in Monday trading before closing 0.25 percent higher at 27,736.47. To 1,953.63, the Topix index increased by 0.48 percent.

The Kospi in South Korea rose 0.66 percent to 2,757.90 on the day.

In other Australian markets, the S&P/ASX 200 index increased 0.27 percent to close at 7,513.70.

The S&P SL20 index fell 1.48 percent to 2,788.97 in Sri Lanka as the country’s economic and political instability continued. On Friday, a carefully watched segment of U.S. Treasury yields inverted as short-term rates surged in response to the announcement of jobs data in the United States; heightening fears of an impending recession.

The 10-year Treasury yield was 2.3988 percent last week, while the 2-year Treasury note yield was 2.4546 percent. Yields move in the opposite direction of prices, with one basis point equaling 0.01 percent.

Inversions of the yield curve have traditionally preceded recessions. However, many economists feel the angle invert for a long time before it can provide a reliable indicator. The U.S. dollar index, which measures the greenback’s value against a basket of currencies, was 98.672, up from lows of under 98 in late March.

The Japanese yen was trading at 122.60 per dollar, up from last week’s highs of 124. The Australian dollar traded at $0.7511 after spending much of the week from $0.747 to $0.753.

In the afternoon of Asian trading hours, oil prices rose, with international benchmark Brent crude futures falling 0.24 percent to $104.14 a barrel. Crude futures in the United States traded at $99.22 per barrel, close to the flatline.