TOKYO: Tokyo stocks rebounded Tuesday morning after strong US economic data powered Wall Street to another record close a day after being hit by Italy uncertainty.
The Institute for Supply Management reported Monday that the US service sector saw growth accelerate at the fastest pace in more than a year in November as employment and export orders rose.
“The favourable ISM non-manufacturing data from the US will once again breathe life into stocks,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities.
“After experiencing surprise outcomes like Brexit, investors have shown a tendency to reduce their positions ahead of news events, leading to price declines, but we are still in the midst of a continuing Trump-driven rally,” he told Bloomberg News.
Donald Trump’s surprise US presidential victory has sparked a rally in equity markets and pushed the dollar higher on expectations of big government spending and a rise in interest rates.
Tokyo’s benchmark Nikkei 225 index rose 0.52 percent, or 95.84 points, to end the morning at 18,370.83, while the broader Topix index of all first-section issues was up 0.70 percent, or 10.27 points, at 1,477.23.
The gain reversed Monday’s losses triggered by worries about political instability in the eurozone and beyond after the resignation of Prime Minister Matteo Renzi following a crushing defeat in a constitutional referendum.
“Japan was the only major market trading immediately after the (referendum) results, so it feels like it took the blow from investors who wanted to sell for hedging purposes,” said Hajime Sakai, a fund manager at Mito Securities.
