Upbeat Japanese growth data failed to drive Tokyo stocks higher on Monday with the benchmark index slipping into negative territory by the close. The Nikkei 225 index at the Tokyo Stock Exchange edged down 3.71 points to finish at 20,457.19, while the Topix index of all first-section shares lost 0.30 percent, or 5.07 points, to close at 1,661.99. Shares opened higher after official data showed the economy grew 1.0 percent in the first quarter, up from an initial estimate of a 0.6 percent expansion.
The upbeat data suggested the Bank of Japan (BoJ) would wait to unveil further monetary stimulus, which would tend to weaken the yen. The BoJ has been "forecasting that prices and business investment will continue picking up, so while today's report isn't perfect, it does support their view", Akio Kato, general manager of the trading department at Kokusai Asset Management, told Bloomberg News. "This links with the view that we won't see additional easing at least through the second half of this year." A falling yen is a plus for Japanese exporters' profitability, but there are growing concerns about its weakness pushing up import costs, and hurting consumer and business spending.
The greenback was at 125.52 yen in afternoon trade, slightly lower than 125.56 yen in New York where it climbed briefly to a 13-year high of 125.86 yen, as a strong US jobs report sparked talk that the Federal Reserve would move more quickly to raise interest rates. The US economy pumped out 280,000 jobs in May, far more than expected in a solid sign of growth after a winter stall. The report also showed better wage growth, in an indication of tightening for the labour market.
Toyota fell 1.32 percent to 8,358 yen and Japan's biggest bank Mitsubishi UFJ edged down 0.61 percent to 900.8 yen, while rival Mizuho Financial Group ticked up 0.37 percent to 265.2 yen. On Wall Street Friday the Dow shed 0.31 percent and the S&P 500 dropped 0.14 percent but the tech-rich Nasdaq advanced 0.18 percent.
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