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Last Updated: Monday, 18 August, 2003, 11:07 GMT 12:07 UK
Japan's Nikkei tops 10,000
A Japanese man examines a graph of rising stock prices in a Tokyo shop window
Market rises as recovery looms
The Japanese stock market has risen above the psychologically important 10,000 level for the first time in a year.

The Tokyo Stock Exchange's Nikkei 225 index of leading shares gained 169.50 points on Monday to end the day at 10,032.97 - the first close above the symbolic level since August 26, 2002, when it reached 10,067.74 points.

Japanese stock markets have been depressed for the last year because of economic weakness at home and in Japan's largest export market - the United States.

Now recently published economic figures suggest that a recovery is looming in both countries.

And the strength of stocks on Wall Street - despite the power blackout last week - has added to the confidence in the Japanese market.

"The solid performance on Wall Street after the massive power outage last Friday underscored the underlying bull trend in the global equity market at the moment," said Tsuyoshi Segawa, equity strategist at Shinko Securities.

Recovery at hand?

Global equity markets have recovered strongly in the last few months, boosted by hopes of higher corporate profits and stronger economic growth in 2004.

Shares in Japanese banks - long considered to be burdened with excessive debt - led the stock market recovery, on hopes that they would see a financial turn-around next year.

But retailing shares remained depressed because of fears that Japan's exceptionally wet and cool summer weather will curb consumer spending.

"While there is growing optimism about the future trend of the Japanese economy, and such positive expectations are encouraging investors to buy more equities, investors remain realistic," said Mr Segawa.

Growth at last

Japan reported that its economy grew by an unusually strong 0.6% in the April to June quarter, compared to the previous three months, its best performance for nine months.

Rising machinery orders fuelled hopes of a boom in capital spending on the back of increased demand in Asia and North America.

In the United States, GDP in the spring quarter grew at an annual rate of 2.4%, almost double the 1.4% rate reported in the previous six months.

However, some economists say the wet weather - which saw Tokyo department store sales fall by 4% in July - could reduce economic growth by $8bn, or 0.2% of GDP, in the next quarter.

FTSE 100
5786.97 -
Cac 40
5057.74 -
Launch Market Watch Ticker

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