Nikkei Closes Lower Despite Better Than Expected Contraction in Japan Economy

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The Tokyo stock exchange closed slightly lower on Tuesday. A better than expected contraction of the Japanese economy in the first quarter limited the loss.

 

Investors, however, remained cautious in anticipation of key US inflation data to be released later this week. A sharp rise in the general price level in the United States could prompt the Federal Reserve to reverse its stimulus policy more quickly than expected.

Government figures showed that the Japanese economy shrank by 3.9 percent in the first quarter. An earlier estimate was based on a contraction of 5.1 percent. Economists had expected a contraction of 4.8 percent. Tokyo’s leading Nikkei ended up 0.2 percent lower for the day at 28,963.56 points. Heavy price losses among heavyweights such as tech investor SoftBank and air conditioner manufacturer Daikin Industries kept the main index in the negative.

Trading in the share of the Japanese pharmaceutical company Eisai was halted because it reached the permitted daily increase limit of about 19 percent. Investors reacted enthusiastically to the news that the Alzheimer’s drug from Eisai and his US partner Biogen has been approved for use in the US. Biogen rose nearly 40 percent in value on Wall Street on Monday.

The Chinese stock markets fell slightly. The stock market indicator in Shanghai was 0.8 percent lower, while the Hang Seng index in Hong Kong lost 0.3 percent. The Kospi in Seoul fell 0.1 percent, and the Australian All Ordinaries in Sydney gained 0.2 percent.

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