9 August 2005, 11:43  Tokyo stocks close higher on expectations of faster economic recovery

Share prices closed higher across the board, as the mid-afternoon release of strong June machinery orders data fortified expectations of accelerated economic growth, brokers said. The Nikkei 225 index closed up 121.34 points or 1.0 pct at 11,900.32, after hitting 11,958.07, its highest since last Wednesday, when the blue-chip marker briefly topped 12,000 for the first time in 15 months. The broader-based TOPIX index of all First Section issues advanced 14.37 points or 1.2 pct to 1,206.27. Some 87 pct of the 1,665 First Section stocks closed higher, on trading volume of 1.65 bln shares. Core private-sector machinery orders surged a seasonally adjusted 11.1 pct in June from the previous month, the Cabinet Office said. The increase exceeded even the most bullish expectation in a Nihon Keizai Shimbun poll of 22 brokerage houses and research institutes. All 22 expected an increase, with their forecasts ranging from 2.3 pct to 9.6 pct and averaging 5.7 pct. "We have upgraded our basic view of the trend in machinery orders to increasing at a moderate pace," a Cabinet Office official said. It was the first upgrade in six months. On Friday, the government is expected to report that the economy grew for a third straight quarter in the three months to June, as export growth accelerated slightly, joining expanding consumer and corporate investment spending in driving growth. The economy is projected to have grown at an annualized rate of 2.0 pct, the average of forecasts in an XFN-Asia poll of 10 private-sector economists.

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