RTTNews - The stock market in Japan ended in positive territory on Monday, led by exporters and automotive stocks on expectations that the worst for the global economy is over despite a mixed closing on Wall Street last Friday. A better-than-expected job report from the U.S. Labor Department raised hopes that signs of a recovery in the U.S are beginning to emerge even as nagging doubts about the pace of economic recovery still linger in the minds.

In the U.S on Friday, the much-awaited report from Labor Department showed that non-farm payroll employment fell by 345,000 jobs in May following a revised decrease of 504,000 jobs in April. Economists had expected a decrease of about 520,000 jobs compared to the loss of 539,000 jobs originally reported for the previous month. At the same time, the report said that the unemployment rate jumped to its highest level since August 1983 of 9.4% percent in May from 8.9% percent in April. Economists were expecting the unemployment rate to rise to 9.2%.

While welcoming the surprise drop in job losses during May 2009, analysts were apprehensive about the rising unemployment rate in the country to the highest level since August 1983 and preferred to exercise more caution before jumping in to any concrete conclusion. The euphoria in the market was tempered on growing concerns about recovery prospects and the major indices ended mixed.

The Dow finished up by 12.89 points of 0.2% at 8,763, the Nasdaq slipped by 0.60 points or 0.03% to 1,849 and the S&P 500 edged down by 2.37 points or 0.3% to 940.

The Nikkei 225 Average opened sharply higher at 9,829 compared to its previous close of 9,768, on the better than expected U.S. jobs report as well as a weaker local currency which settled down at the mid-98 yen region. However, mixed reaction for the job report in the U.S capped the gains as traders preferred to adopt a wait-and-watch attitude till clear signals emerge about the direction and pace of global economic recovery. Exporters and automakers led the gains and the market held on to the initial gains, while moving in a narrow range. The index ended with a gain of 97.62 points, or 1.00% at 9,866. The broader Topix Index of all first section issues also edged higher to 927, a gain of 10.33 points, or 1.1%.

On the economic front, the Ministry of Finance , in a preliminary report said that the nation recorded an unadjusted surplus of 630 billion yen in April, sharply lower than economists' expectation of a surplus of 850 billion yen. The Surplus in the current account for March was at 1.485 trillion yen. The current account surplus has been steadily declining month-over-month and the latest decline is the 14th consecutive month of decline. Year-over-year, THE current account surplus declined 54.5%. The report further noted that the trade balance fell 69.2% year-over-year to 184.3 billion. Imports declined 37.8% year-on-year to 3.73 trillion yen, while exports dropped 40.6% to 3.915 trillion yen.

Crude oil prices retreated from its high and ended weaker by $1.34 at $67.10 a barrel in Asian trading. Light sweet crude for July delivery closed marginally lower at $68.44 a doller on Friday in New York on strengthening of the US dollar.

Exporters advanced on a weaker local currency. Canon Inc. advanced 3.38%, Nikon gained 1.77% and Sony Corp. edged up 0.56%.. Komatsu, the second largest manufacturer of construction machinery in the world, surged up 5.98% after two brokerages recommended the stock in their research note to the investors on expectations of a pick-up in demand.

Automakers also advanced on the weaker local currency, as they export more than half of their products to other countries. Mazda Motor Co gained more than 6%, and Toyota Motor advanced 1.30%. A newspaper report revealed that Toyota Motor is contemplating reduction in production costs for smaller cars by as much as 100 billion yen by the year 2012.

Financial stocks ended in positive territory on hopes of positive outlook for the economy. Mitsubishi UFJ gained 3.21%, Mizuho Financial soared 7.47%, Resona Holdings added 1.27% and Sumitomo Mitsui surged up 6.38%.

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