Tokyo: Japan’s Nikkei share average rose 1.2% on Friday, propped up by a rally in Fast Retailing and relief that North Korea’s rocket launch ended in failure, but weaker-than-expected growth figures from China weighed on the upside.
China’s annual economic growth slowed to 8.1% in the first quarter from 8.9% in the last three months of 2011. Economists polled by Reuters had forecast 8.3%.
“The (China) figure trimmed Nikkei gains, but the weak data does raise expectations for stimulus and policy easing,” said Masayuki Doshida, senior market analyst at Rakuten Securities.
Tokyo stocks with high exposure to China’s economy pared earlier gains. Construction machinery maker Komatsu Ltd ended up 1% and industrial robot maker Fanuc Corp rose 2.8%.
The benchmark Nikkei added 113.20 points to 9,637.99 after hitting an intraday high of 9,690.29 ahead of the Chinese data.
The index lost 0.5% on the week after it ended a seven-session losing streak on Thursday.
Topping the Topix turnover list was Fast Retailing, which soared 8.6% after the leading Asian apparel retailer forecast a record profit for the year ending in August after a strong second quarter.
The stock contributed nearly 61 points to the Nikkei’s daily increase.
“The correction has run its course. The next catalyst is monetary easing. Everyone is waiting for the US Federal Reserve meeting and then the Bank of Japan decision later this month,” said Yoshihiko Tabei, chief analyst at Kazaka Securities.
Market players expect the BOJ to boost government bond purchases to support the still fragile economy when it meets on 27 April.
The Nikkei is down 4.4% so far in April after rallying more than 19% in January-March to log its best first quarter performance in 24 years, lifted by robust US economic data and liquidity boosting programmes by central banks.
The broader Topix gained 0.7% to 815.48.
Trading volume increased, with 2.2 billion shares changing hands on the main board, up from 1.8 billion shares on Thursday.
Also contributing to the spike in volume was the settlement of Nikkei options contracts expiring in April.
The Osaka Securities Exchange said after the bell on Friday that options contracts settled at 9,638.83.
North Korea Rocket
Pyongyang’s defiant launch of its long-range rocket ended in failure on Friday, with the missile crashing off the west coast of South Korea minutes before Tokyo’s market open.
Tokyo’s equities shrugged off the launch, but it gave cautious investors a reason to return to the market.
Japanese banks gained 2.8% and was among the best performing sectors on the main board after Goldman Sachs hiked target prices for Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.
“Japanese banks have standout global liquidity from ample deposits ... We think growth in overseas lending would improve profitability and prompt the market to recognize the value of Japanese banks’ deposit base,” Goldman analysts said in a note.
The three megabanks rose between 3.6% and 4%.
Bucking the trend, Sony Corp sagged 5.5%, with market participants voicing concern that the company’s revival plan mapped out by new chief executive Kazuo Hirai late on Thursday was not enough to turn around the ailing consumer electronics maker.
Sony shares shed 11.6% on the week, marking its biggest weekly percentage loss since last November, after it flagged a record $6.4 billion annual net loss, double an earlier forecast and a fourth straight year of red ink on Tuesday.