Tokyo shares bounce back as Japan exits recession

TOKYO (AFP) – Tokyo stocks rose yesterday supported by gains on Wall Street with investors digesting Japan’s third-quarter gross domestic product (GDP) figures, which showed an exit from recession. The benchmark Nikkei 225 index added 2.05 per cent, or 521.06 points, at 25,906.93, while the broader Topix index gained 1.68 per cent, or 28.59 points, to 1,731.81.

Shortly before the opening bell, government figures suggested Japan’s economy exited recession in the third quarter, with its GDP growing a better-than-expected 5.0 per cent thanks to a rise in domestic demand and exports – signs of recovery after a record contraction. The Tokyo bourse was also lifted by overnight gains on Wall Street amid hopes for further economic stimulus in the United States (US) under the new administration.

“In the risk-on atmosphere, the market headed north while riding out profit-taking moves,” Okasan Online said in a note.

Investors focussed on shares that react sensitively to changes in broad economic conditions, such as steel and shipping, said SMBC Nikko Securities.

“Today’s Nikkei average enjoyed a major rebound… Momentum has continued since last week when investors cheered the progress made on the development of vaccines against the coronavirus,” SMBC Nikko said.

People take escalators at a shopping building in Tokyo. PHOTO: AP