July 15, 2020 / 6:43 AM / a month ago

Japan shares hit 5-week high on vaccine, economic growth hopes

TOKYO, July 15 (Reuters) - Japanese stocks rose on Wednesday to a five-week high as encouraging results from a coronavirus vaccine study and optimism about swift economic growth supported expectations that corporate earnings would pick up in the second half of the year.

The Nikkei index settled 1.59% higher at 22,945.50 after hitting its highest level since June 10, with industrial and consumer discretional shares leading the advance.

Risk sentiment got a boost after U.S. biotech firm Moderna Inc said its experimental coronavirus vaccine showed it was safe and provoked immune responses in an early-stage study.

“Japanese value shares are starting to catch up with the recent rally in global equities,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management.

“In the bigger picture, expectations for economic growth remain solid. We now have better methods to track the coronavirus and are further along in developing drugs to treat it.”

Recent data from many major economies has shown signs that corporate activity and consumer spending are recovering from coronavirus-induced sharp declines.

Meanwhile, the Bank of Japan kept monetary policy steady on Wednesday and maintained its view that the economy would gradually emerge from the pandemic.

There were 207 advancers on the Nikkei index against 16 decliners.

The largest percentage gainer was car maker Nissan Motor Co Ltd with a rise of 7.25%. Advertising agency Dentsu Group Inc gained 5.48%, while plant engineering company JGC Holdings Corp added 5.37%.

The top percentage loser was pharmaceutical company Eisai Co Ltd with a 1.79% drop. Drugmaker Kyowa Kirin Co Ltd lost 1.32%, while Tokai Carbon Co Ltd slipped 0.71%.

The broader TOPIX index rose 1.56% to 1,589.51.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.08 billion, compared with the 30-day average of 1.3 billion. (Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

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