Japan’s Nikkei share average extended gains on Wednesday, thanks to relief the worst may be over for Chinese share markets and the debt crisis in Greece, with stronger-than-expected Chinese economic data giving an additional boost.
The Nikkei rose 0.4 percent to 20,469.61, hitting its highest level in nearly two weeks while the broader Topix also climbed 0.4 percent to 1,644.91.
The move largely reflected rises in global shares after Chinese markets regained a measure of stability this week following a month-long rout.
Investors are also hoping that Greece’s parliament will pass reforms demanded by the country’s creditors later in the day.
There was also limited interest in the Bank of Japan’s policy meeting ending later in the day, which is widely expected to hold its policy on hold.
“It makes complete sense that there is a relief in markets now, following a recovery in Chinese markets and a resolution of sorts in Europe. If those two risk factors are behind us, then the focus will be on earnings, which are expected to be good,” said Stefan Worrall, director of equity sales at Credit Suisse.
“But the question remains whether these instabilities are genuinely behind us,” he added. While there remain some concerns that some wealthy Chinese may tighten their purse strings after massive losses on stocks, the data published on Wednesday showed the world’s second largest economy fared better than expected in recent months.
China’s GDP grew 7.0 percent from a year earlier in April-June, slightly above consensus of 6.9 percent growth. Reading on urban investment, industrial output and retail sales in June all beat expectations.
In addition, a surprisingly weak U.S. retail sales data led to expectations that the Fed’s rate hike may come later rather than sooner, supporting share prices, said a trader at a Japanese brokerage.
Investors snatched up some companies that announced upbeat earnings, such as cinema operator Toho, which rose 3.2 percent, and restaurant chain Saizeriya, which jumped 5.8 percent.
Department store operator Takashimaya rose 5.6 percent after a brokerage upgrade, erasing last week’s losses k spurred by fears that China’s stock mayhem may hurt a shopping spree by Chinese tourists visiting Japan.
Many tourism-related shares have risen so far this year on hopes of an increase in sales to soaring foreign visitors.