By Makiko Suzuki
Japanese shares may gain after reports showed employment and manufacturing growth in the U.S., Japan's largest overseas market, expanded more than expected. Exporters such as Sony Corp. may pace advances.
U.S. companies hired last month at almost twice the pace in April and manufacturing unexpectedly accelerated in May as orders picked up, while inflation climbed less than economists forecast.
``Investors have paid a lot of attention to the employment and manufacturing data and both figures turned out quite good,'' said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Securities Co. in Tokyo. ``The Japanese market will have a large rise as well.''
Machinery makers such as Komatsu Ltd. may decline should Japanese capital spending figures due 10 minutes before the market opens show a greater-than-expected slowdown.
Nikkei 225 Stock Average futures expiring in June closed at 18,050 in Chicago on June 1, up from 17,950 in Osaka and 17,970 in Singapore. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, rose 0.6 percent.
The Nikkei advanced 2.7 percent to 17,958.88 last week and the broader Topix index added 3.1 percent to 1767.88.
U.S.-traded receipts of Sony, the world's biggest video- game maker, added 0.4 percent from the company's closing stock price last week. The receipts of Toyota Motor Corp., the world's largest carmaker by market value, rose 0.5 percent.
The U.S. is Sony's largest overseas market and Toyota generated more than one third of its sales in North America.
Resurgent Economy?
U.S. employers added 157,000 non-farm jobs in May after boosting payrolls by 80,000 in April, a government report showed on June 1. Economists surveyed by Bloomberg News had expected an increase of 132,000 jobs in May.
The Institute for Supply Management's factory index rose to 55 in May, the highest in 13 months. Readings greater than 50 signal expansion. Economists expected the index to slip to 54, according to a Bloomberg News survey.
A separate report said core personal consumption expenditures, the Federal Reserve's preferred measure of inflation, rose 0.1 percent, compared with a gain of 0.2 percent forecast by economists.
``I am sure that the slowdown in the U.S. economy is almost over,'' said Ryoji Musha, chief investment officer at the Tokyo- based brokerage unit of Deutsche Bank AG . ``Fundamentals of the U.S., such as manufacturing, employment and corporate earnings, are all good and investors will shift their focus to a reacceleration of the global economy.''
Mitsui Engineering
At home, corporate investment increased 10.1 percent in the first quarter ended March, decelerating from a 16.8 percent growth in the previous three months, according to an economist survey by Bloomberg News. Komatsu is the world's second-biggest maker of earth-moving equipment.
Mitsui Engineering & Shipbuilding Co. may advance after the Nikkei newspaper reported the company, Hitachi Plant Technology, and JFE Engineering have separately developed devices that sterilize ballast seawater.
Unloaded ships carry seawater in their ballast tanks to improve stability on the seas. These ships dump the water at ports when they are loaded with cargo, dispersing marine organisms and causing environmental damage. The market for ballast water treatment equipment may reach as much as 2 trillion yen ($16 billion), the Nikkei said. [via]
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