Tokyo: Stocks open higher after GDP beats expectations

[TOKYO] Tokyo stocks opened higher on Monday, with investors putting trade worries on the back burner after data showed Japan's economy grew in the first quarter, defying expectations.

The benchmark Nikkei 225 index rose 0.74 per cent, or 157.15 points, to 21,407.24 in early trade while the broader Topix index was up 0.52 per cent, or 8.04 points, at 1,562.29.

The positive start came after government data showed the world's third-largest economy grew 0.5 per cent in the January-March quarter despite expectations for a mild contraction.

Investors remained concerned about the US-China trade row and were also watching how talks on threatened US auto tariffs will go, said Makoto Sengoku, an analyst at Tokai Tokyo Research Center.

"But they consider these trade issues as neutral for now, after the GDP data," he told AFP.

Stocks were also being supported by local media reports that Prime Minister Shinzo Abe may call a snap general election to coincide with an upper house election due this summer, Mr Sengoku said.

"If that is true, we'd expect the government will compile an economic package" to tempt voters, he said.

US President Donald Trump on Friday announced a six-month delay in imposing steep tariffs on auto imports, seeking to maintain the pressure on Europe and Japan for trade concessions.

A report by Commerce Secretary Wilbur Ross concluded that America's shrinking share of the auto market jeopardised its research, development and manufacturing - all "vital to national security", according to Trump.

Japan's Toyota, which has factories and research centres in the United States issued a strongly-worded statement.

"Today's proclamation sends a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued," it read.

"If import quotas are imposed, the biggest losers will be consumers who will pay more and have fewer vehicle choices."

Toyota shares were slightly lower, slipping 0.10 per cent to 6,495 yen.

Nissan fell 1.15 per cent to 771.4 yen after the crisis-hit carmaker shook up its executive board Friday and added a top director from partner Renault.

Financial stocks were higher, with Mitsubishi UFJ rising 0.78 per cent to 505.9 yen.

The dollar firmed to 110.18 yen from 110.02 yen in New York on Friday.

AFP