RTTNews - The stock market in Japan ended in positive territory, led by resource stocks and shipping companies, on hopes of a recovery in the economy. A surprisingly positive industrial production data generated optimism that the recession is close to coming to an end and the economy is on course for recovery led by export led growth. A positive closing on Wall Street overnight and rising commodity prices in international market also lifted market sentiment.

In the U.S., easing concerns about rising bond yields, the $26.0 billion seven-year note auction conducted by the Treasury Department in the U.S. attracted a high-yield of 3.30% while seeing modestly strong demand, with the bid-to-cover ratio coming in at 2.26. A report from the Commerce Department showed that orders for durable goods jumped 1.9% in April following a downwardly revised 2.1% decrease in March. Another report from the Commerce Department revealed that new homes sales edged up 0.3% to an annual rate of 352,000 in April from a downwardly revised 351,000 in March. A separate report from the Labor Department showed that initial jobless claims in the week ended May 23rd came in at 623,000. This was down 13,000 from a revised mark of 636,000 in the previous week. However, continuing claims, which measure the number of people receiving ongoing unemployment help, climbed 110,000 to 6.788 million.

The Dow closed up 103.78 points or 1.3% at 8,404, the Nasdaq closed up 20.71 points or 1.2% at 1,752 and the S&P 500 closed up 13.77 points or 1.5% at 907.

The Nikkei 225 Average opened higher at 9,472 compared to its previous close at 9,451, mirroring the gains on Wall Street. However, weak economic data related to consumer prices raised fears that the country might move into deflation. After moving near the unchanged line amid volatile trading in the forenoon session, the index advanced following the release of better-than-expected industrial output data, raising hopes that export revival might help the country come out of recession.

Rising commodity prices supported the upside, with the index finally ending at the day's high of 9,522, representing a gain of 71.11 points, or 0.75%. The broader Topix Index of all first section issues edged up 2.32 points, or 0.26%, to close at 898.

On the economic front, the Ministry of Finance revealed that joblessness in Japan rose to a five year high of 5.0% in April. Month-over-month, the rate increased 0.2% from March, the report noted. In a separate report, the Ministry stated that household spending declined 1.3% in April, the 14th consecutive monthly fall. In a separate report, the Ministry of Economy, Trade and Industry stated that Industrial output in the country rose by a record 5.2% in April, led by a 15.2% hike in production of electronic parts and devices as well as a 13.8% rise in production of chemicals.

Oil stocks advanced on higher oil prices. Crude oil prices ended 21 cents higher at $65.29 in Asian trading. Light crude oil price for July delivery closed at $65.08 in New York Mercantile Exchange, following an unexpected drop in weekly inventory data in the U.S. and a decision by OPEC not to tinker with output rates.

Inpex, the leading oil exporter in the country, soared 6.34%, Showa Shell advanced 3.97% and Nippon Oil added 0.35%.

The shares of Kumiai Chemical Industry surged more than 22% after brokerage Nomura Securities upgraded the credit rating of the company by one notch to 3 out of 3.

Shipping stocks advanced following a sharp rise in sea cargo rates. Kawasaki Kishen gained 6.42%, Mitsui OSK Lines advanced 5.42% and Nippon Yusen rose 5.31%.

On the other hand, financial stocks ended weaker. Mitsuibishi UFJ shed 4.12%, Mizuho Financial lost 1.30%, Resona Holdings edged down 0.35% and Sumitomo Mitsui declined 1.34%.

Retail stocks ended mixed after the release of a weaker household spending report. Seven & I Holdings slipped 1.71%, and J Front Retailing lost 0.76%. Fast Retailing, however, bucked the trend and advanced 2.92%.

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