(MENAFN- Investor Ideas) The Nikkei initially opened higher but retreated during the day to close up 0.3% at around 37,552 points. Meanwhile, the broader Topix Index saw a slight increase of 0.14% to close at 2,666 points. Japanese stocks climbed for the second consecutive session, rebounding from recent lows as they followed the positive momentum of Wall Street overnight, with concerns about a broader conflict in the Middle East easing. The upswing in the Japanese stock market was supported by improvements in both the manufacturing and services sectors in Japan. Although manufacturing is still contracting, the pace has slowed, while the service sector is experiencing robust growth. In April, Japan's Manufacturing PMI rose to 49.9, indicating stabilisation after 11 months of contraction, while the Services PMI surged to 54.6 points, hinting at strong growth. Market participants are now awaiting the policy decision from the Bank of Japan (BoJ) later this week, with the consensus expecting the interest rate to remain unchanged at 0%. BoJ Governor Kazuo Ueda mentioned that the bank would consider raising short-term interest rates if the economy demonstrated sustained progress toward achieving the 2% inflation target. However, he did not specify the timing or scale of any potential rate hike, which could potentially impact the equity market. Among the advancing stocks contributing to the Japanese benchmark are Fast Retailing, which gained 1.8%, Sumitomo Mitsui, up by 1%, and Shin-Etsu Chemical, which rose by 1.5%. However, some laggards were dragging down the index, including Toyota, which declined by 0.17%, and Nidec Corp, down by 0.25% following its Q4 report showing a net loss due to restructuring costs as its EV motor business faced tough competition in China. Despite a 9.3% increase in revenue, losses widened in its automotive segment. However, Nidec forecasts a 32% net profit increase for the current fiscal year and plans to expand production of data centre equipment, driven by opportunities in generative AI.
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