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TOKYO, Aug 15 (Reuters) – Japan’s Nikkei share average rose on Thursday, as data showed better-than-expected economic growth in the June quarter and Wall Street closed higher overnight on September rate cut prospects in a boost to investor sentiment.
The Nikkei closed 0.8% higher at 36,726.64, locking in a fourth straight day of gains, while the broader Topix finished up 0.7% at 2,600.75.
Stocks sensitive to the economy’s performance rose after data showed Japan’s economy expanded by a faster-than-expected annualized 3.1% in April-June.
Banks rose 2.8% to lead sectoral gains, while both securities firms and oil and coal producers gained 2.7%.
The positive economic news gave support as investors continued to buy shares that have underperformed since last month, said Kenji Abe, chief strategist at Daiwa Securities.
“Japanese equity prices plunged from mid-July to early August and are now quite undervalued,” he said.
The Nikkei tanked 12.4% on Aug. 5 in its biggest single-day fall since Black Monday amid U.S. recession fears and a sharply stronger yen.
It has since clawed back all the losses from that fall but remains well off an all-time peak of 42,426.77 touched on July 11.
Wall Street also lent some support to the Nikkei on Thursday. U.S. stocks closed higher on Wednesday as fresh inflation data reassured investors that the Federal Reserve would start cutting rates next month.
Japanese equities’ gains narrowed somewhat during afternoon trade as investor attention turned toward U.S. retail sales and weekly unemployment data due later in the day to gauge the health of the world’s largest economy.
Among individual stocks, Fast Retailing climbed 2.1% to give the Nikkei the biggest lift, followed by chip-making equipment giant Tokyo Electron, up 1.5%, and AI-focused startup investor SoftBank Group adding 2.2%.
The largest percentage gainers in the Nikkei were Dentsu Group, up 9.8%, followed by Socionext gaining 7.9% and Kawasaki Heavy Industries up by 7.4%.
