Japanese shares edged higher on stronger-than-expected GDP data in the first quarter
Japan’s Nikkei share average edged higher on Monday as domestic economic growth in the first quarter proved firmer than expected, although market gains were limited as the data also pointed towards lacklustre domestic demand.
The Nikkei was up 0.3% at 21,309.25 as of 0159 GMT.
Data released on Monday showed Japan’s gross domestic product (GDP) grew at an annualised 2.1% in the first quarter versus expectations of a 0.2% contraction. However, the surprise expansion was mostly caused by imports declining faster than exports.
The GDP surprised for the better and that’s the main driver behind the stock market’s gains. Those who bet on weak data were caught wrong-footed and reversing their positions, said Takashi Hiroki, chief strategist at Monex Securities.
But the GDP data “is not encouraging, with private consumption and capex declining and exports rising only because weak domestic demand depressed imports,” he said, adding that Monday’s market advance is purely technical, few are buying because they think the economy is doing well.
Exporters gained as the yen weakened to a two-week low against the dollar.
Toyota Motor Corp added 0.15%, Komatsu Inc. gained 0.25%, Canon Inc. rose 1.1% and Nintendo Co 1.25%.
Technology firms, on the other hand, sagged after U.S. counterparts slipped on Friday due to continuing trade tensions between the United States and China.
Tokyo Electron shed 2.8%, Sony Corp fell 1.7% and Toshiba Corporation dropped 1.1%.
Paper manufacturing company Hokuetsu Corporation soared 10.7% after forecasting a 62.9% operating profit surge for the year ending March 2020.
TYK Corporation sank 17.5% after the maker of heat resistant materials forecast its operating profit for the current financial year will likely decline by 30.3%.
Of Tokyo’s 33 subindexes, 20 were higher, led by real estate.
The broader Topix dipped 0.04% to 1,553.60.