The Japanese stock market is sharply higher on Tuesday, recouping the losses of the previous session, with the benchmark Nikkei index surging more than 600 points to be above the 29,400 level, as traders ignored the negative cues overnight from Wall Street and digested local preliminary GDP data.
However, the upside is capped as the government imposes tougher measures to contain the daily coronavirus infections rate, including restrictions and state of emergency in more prefectures, amid the fourth wave of coronavirus infections driven by more contagious variants.
The benchmark Nikkei 225 Index is gaining 634.01 points or 2.28 percent to 28,458.84, after touching a high of 28,480.90 earlier. Japanese shares closed notably lower on Monday.
Market heavyweight SoftBank Group and Uniqlo operator Fast Retailing are gaining almost 3 percent each. Among automakers, Honda is gaining more than 3 percent and Toyota is adding almost 2 percent.
In the tech space, Advantest is gaining more than 2 percent and Tokyo Electron is more than 1 percent, while Screen Holdings is edging down 0.3 percent. In the banking sector, Sumitomo Mitsui Financial is gaining almost 2 percent, Mitsubishi UFJ Financial is adding more than 2 percent and Mizuho Financial is up more than 1 percent.
The major exporters are mixed, with Sony edging up 0.2 percent, while Mitsubishi Electric and Canon are gaining more than 1 percent each. Panasonic edging down 0.5 percent
Among the other major gainers, Recruit Holdings is gaining more than 7 percent, while IHI, T&D Holdings and Dai-ichi Life are adding more than 6 percent each. Sumitomo Metal and Japan Steel Toyobo are up almost 6 2 percent each, while Ajinomoto is rising more than 5 percent. Kobe Steel, Isetan Mitsukoshi and KDDI are gaining almost 5 percent, while JCG Holding, Mitsui E&S Holdings and JFE Holdings are adding more than 4 percent.
Conversely, Nisshin Seifun is losing 5 percent and Nippon Light metal is declining more than 4 percent, while Osaka Gas, Tokyo Gas and NEC are down more than 2 percent each.
In other news, the Tokyo Stock Exchange is planning to extend trading hours beyond the current 3 p.m. so that it can stay open longer to lure more domestic retailers who trade after work and foreign investors in European and U.S. time zones, the Nikkei reported.
In economic news, Japan's gross domestic product contracted an annualized 5.1 percent in the first quarter of 2021, the Cabinet Office said in Tuesday's preliminary report. That missed expectations for a decline of 4.6 percent following the downwardly revised 11.6 percent increase in the previous three months (originally 11.7 percent). On a quarterly basis, GDP sank 1.3 percent - again missing expectations for a drop of 1.2 percent following the 2.8 percent increase in the three months prior. Capital expenditure was down 1.4 percent on quarter, shy of expectations for a gain of 1.1 percent following the 4.3 percent jump in the previous quarter.
In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Tuesday.
On Wall Street, stocks regained ground after an early move to the downside on Monday but still ended the day in negative territory. The major averages partly offset the notable rebound seen to close out the previous week.
After falling by as much as 200 points, the Dow ended the day down by just 54.34 points or 0.2 percent at 34,327.79. The Nasdaq slid 50.93 points or 0.4 percent to 13,379.05 and the S&P 500 fell 10.56 points or 0.3 percent to 4,163.29.
The major European also saw modest weakness on the day. While the French CAC 40 Index dipped by 0.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index edged down by 0.2 percent and 0.1 percent, respectively.
Crude oil prices rose sharply Monday on hopes energy demand will pick up as the U.S. and European economies show signs of a quick recovery from the pandemic. West Texas Intermediate Crude oil futures for June rose $0.90 or 1.4 percent at $66.27 a barrel.
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