June 8, 2020 / 3:12 AM / a month ago

Japan stocks at 3-1/2-month high as U.S. jobs data fans recovery hopes

SYDNEY, June 8 (Reuters) - Japanese shares climbed to a 3-1/2-month high on Monday after a surprise increase in U.S. employment gave investors further confidence of a swift global economic recovery from a coronavirus-triggered slump.

The benchmark Nikkei average rose 0.9% to 23,075.73 by the midday break, its highest level since Feb. 21.

All three major indexes on the Wall Street gained more than 2% on Friday, after a strikingly upbeat May jobs report unexpectedly provided evidence that the U.S. economy is headed for a quicker-than-anticipated recovery.

The U.S. economy added 2.5 million jobs last month, pushing the unemployment rate down to 13.3%, although analysts forecast unemployment soaring to a 19.8%.

Reflecting continued confidence in the revival of the global economy, the safe-haven yen weakened further, with the dollar/yen hitting a 2-1/2-month high of 109.85 yen late Friday.

As a weaker yen boosts Japanese manufacturers’ profits made abroad when repatriated, shares of export-oriented automakers were in demand, with Nissan and Mazda jumping 5.9% and 4.5%, respectively.

Longer-term U.S. Treasury yields surged on Friday, providing a tailwind for Tokyo-listed financial stocks . Dai-ichi Life Holdings soared 6.2% and Mitsubishi UFJ Financial Group (MUFG) added 4.2%.

Elsewhere, oil-related companies attracted buying as oil prices advanced after the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies agreed on Saturday to extend record oil production cuts until the end of July.

Japan’s top oil and gas exploration companies Inpex leaped 4.3% and Japan Petroleum Exploration gained 2.7%, while oil wholesalers JXTG Holdings and Idemitsu Kosan Showa Shell surged 2.7% and 2.6%, respectively.

The broader Topix rose 0.6% to 1,621.83 by the recess, a level unseen since Feb. 25., with three-fourths of the 33 sector sub-indexes on the Tokyo exchange trading higher.

The market, however, did not react to Japan’s revised GDP data that showed a slightly stronger-than-expected capex. (Reporting by Tomo Uetake; Editing by Sherry Jacob-Phillips)

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