US jobs crucial to Japanese stocks

US non-farm payrolls data is going to be closely scrutinised by Tokyo investors says kabu.com chief strategist Tatsunori Kawai.

Tokyo investors will take their cues for trade next week from Friday's US payrolls report and Japanese data over the coming days, analysts say.

"The US non-farm payrolls data is going to be closely scrutinised," Tatsunori Kawai, kabu.com chief strategist, told Dow Jones Newswires.

Robust employment data could staunch fears of an economic slowdown as the Federal Reserve reduces its stimulus drive, dealers said.

"The upcoming jobs data is viewed as critical for markets, which are pricing in further growth. So any hints that they might be good are positive for sentiment," said Mutsumi Kagawa, senior strategist at Tokai Tokyo Research Centre.

Tokyo stocks closed Friday 2.17 per cent higher, adding 307.29 points to 14,462.41 following gains on Wall Street and thanks to a weaker yen.

Even so the Nikkei index still ended the week 3.03 per cent lower following global turmoil at the start of it fuelled by weak data from China and the United States as well as the Federal Reserve's decision to further reduce its stimulus program.

The broader Topix index of all first-section issues was up 2.30 per cent, or 26.77 points, at 1,189.14 on Friday but fell 2.58 per cent over the week.

On Friday Sony shares closed up 4.12 per cent at 1,691 yen after it announced late on Thursday that it was cutting 5000 jobs and exiting the stagnant PC market this year.

Investors cheered the aggressive restructuring plan, which offset the impact of a forecast net loss of $US1.08 billion ($A1.21 billion) for the full year to March, analysts said.

"Sony's stock was cheap enough to warrant picking up on the restructuring theme," Kawai said, adding: "The shares would have probably been killed if they had been trading around the 3000-yen level before this news came out."

An equity trading director at a foreign brokerage said the Tokyo gubernatorial election coming up Sunday had pushed up select shares.

Japan Bridge rose 2.85 per cent to 180 yen as Yoichi Masuzoe, a candidate backed by the ruling Liberal Democratic Party who favours more public works spending, is tipped to win the race.

Camera maker Nikon was up 5.49 per cent at 1,765 yen and car maker Suzuki climbed 2.10 per cent to 2623 yen after the pair reported solid earnings on Thursday.

In currency markets, the dollar was at 102.14 yen, hardly changed from 102.10 yen in New York on Thursday afternoon but well above the mid-101 yen range in Tokyo earlier on Thursday.

Investors will also be keeping an eye on Japanese data due next week including on the current account and machinery orders for December.

"If the current account deficit widens (following a deficit in November), that would be a factor for a cheaper yen in the currency market," Nomura Securities said in a note to clients. A cheaper yen tends to push Japanese stock prices up.


3 min read

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Source: AAP


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