Tokyo stocks close higher despite weak growth data

Tokyo stocks closed higher Monday as investors shrugged off data confirming the Japanese economy had slipped into its first recession since 2015, focusing instead on hopes the coronavirus situation will improve.

Tokyo stocks close higher despite weak growth data
A man looks at an electronic stock quotation board of the Tokyo Stock Exchange in Tokyo on May 18, 2020. Japan dived into its first recession since 2015, according to official data on May 18, with the world's third-largest economy shrinking by 0.9 percent in the first quarter as it wrestles with the fallout from the coronavirus. AFP
The benchmark Nikkei 225 index rose 0.48 percent, or 96.26 points, to 20,133.73 while the broader Topix index ended up 0.38 percent, or 5.52 points, at 1,459.29.

Official data released just before the market opened showed the world's third-largest economy shrank 0.9 percent in the January-March quarter, suffering a contraction for the second consecutive quarter, the definition of a technical recession.

The gloomy figure was even before the pandemic shut down much of the economy and analysts warn the worst is yet to come.

Nevertheless, the first-quarter result was slightly better than economists had forecast, with expectations for a 1.1-percent decline.

The Japanese currency barely moved on the GDP data, with the dollar trading at 107.16 yen against 107.17 yen in New York Friday afternoon.

Daiwa Securities noted the Nikkei kept trading higher "on hopes for economic restart" after Japan lifted its virus state of emergency for most of the country.

But the market "lacks momentum to chase higher prices due to a worsening in US-China relations and the prospect that it will take some time until the coronavirus situation settles down," said Okasan Online Securities.

SoftBank Group gained 1.02 percent to 4,621 yen after the Japanese telecoms and investment giant announced it would buy back up to 500 billion yen ($4.6 billion) of its own stock, or 6.7 percent of the outstanding shares.

But after the closing bell, the struggling conglomerate reported an $8.9-billion annual net loss as the coronavirus pandemic compounded woes caused by its investment in troubled start-up WeWork.

It had warned of a 900 billion yen ($8.4 billion) net loss for the year ended March due to the negative impact of coronavirus and losses related to WeWork.

SoftBank Group also announced Chinese billionaire Jack Ma would resign from its board at a shareholders' meeting set for June 25.

Among other individual stocks, Honda rose 1.40 percent to 2,487.5 yen while Sony was down 2.62 percent at 6,685 yen.

Oil-linked shares ended sharply higher, with crude and natural gas developer Inpex rallying 4.0 percent to 709.3 yen and its rival Japex surging 8.19 percent to 2,085 yen as the gradual reopening of economies in some corners of the world continued to boost oil prices.

Topics: Tokyo stocks , Japanese economy , coronavirus pandemic , Jack Ma
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