TOKYO, Jul 17 – Japanese shares gained 0.58 percent Tuesday morning on bargain-hunting following a three-day weekend, but buying was limited with the dollar under selling pressure.
The benchmark Nikkei index at the Tokyo Stock Exchange rose 50.40 points to 8,774.52 by the lunch break, while the broader Topix index of all first-section shares edged up 0.08 percent, or 0.57 points, to 746.91.
The Nikkei index rebounded from negative territory amid supportive sentiment from better-than-expected earnings results released by JPMorgan and Citigroup during Japan’s three-day-weekend, said Securities Japan chief market analyst Masayuki Otani.
But the upside may be limited, with an under-pressure dollar discouraging investors from buying shares in Japanese exporters, he said.
“With the retail sales figures showing a third consecutive month of decline for the first time since 2008, the dollar is heading lower against the yen,” said Daiwa Securities equities strategist Tsuyoshi Nomaguchi.
US retail sales fell by 0.5 percent last month, the Commerce Department reported. Most analysts had forecast a rise of 0.2 percent.
The greenback was trading at 78.89 yen from 78.83 yen on Monday in New York, when Japanese markets had been closed for a national holiday.
Tachibana Securities market analyst Kenichi Hirano said investors were likely to be cautious before a raft of US economic indicators including June industrial output as well as Federal Reserve Chairman Ben Bernanke’s two-day testimony in Congress starting later Tuesday.
US stocks closed lower Monday after the retail sales figures, with the Dow Jones Industrial Average losing 0.39 percent on concerns about the strength of consumer spending, a key driver of the economy.
Japanese energy firm JX Holdings dropped 5.95 percent to 363 yen in Tokyo after it announced that safety inspection records for gas tanks at one of its domestic refineries had been falsified.
— Dow Jones Newswires contributed to this article