Asian stocks higher after record Wall Street close

Associated Press

TOKYO (AP) — Share prices rose cautiously in Asia on Monday, after the Dow Jones index closed last week at a record high and market players waited for a U.S. jobs report later in the week for confirmation of such optimism about the American economy.

The Nikkei, the benchmark for the Tokyo Stock Exchange, was trading at 14,827.39, gaining 1.3 percent in the first hour of trading. South Korea's Kospi index inched up 0.1 percent to 1,997.48.

Trading in the region is expected to be subdued with markets closed for the Dragon Boat Festival national holidays in China and Hong Kong.

Players are also watching for two events later this week, including the May U.S. jobs report to be released Friday.

Economists expect the U.S. economy created 220,000 jobs in May, and the unemployment rate fell to 6.3 percent, according to FactSet, a financial information provider.

The European Central Bank will also have its interest rate policy meeting, although the impact from that is less clear, given the anticipation already figured in the markets.

Koji Takeuchi, a senior economist at Mizuho Research Institute in Tokyo, said investors were also looking ahead at the Japanese government policies being announced later this month that are expected to include corporate tax cuts — a boon for Japanese companies and a plus for the Japanese economy.

"The growth strategies are going to have a positive impact," he said, adding that the Nikkei had bottomed out at about 14,000 points and was reversing course and heading to 15,000.

So far, Asian trading was starting the week relatively upbeat after two out of the three major U.S. indexes reached all-time highs.

The Dow rose 18.43 points, or 0.1 percent, to close at 16,717.17, less than two points above its previous record high set May 13.

The S&P 500 index rose 3.54 points, or 0.2 percent, to 1,923.57, also closing at a record. The only index to fall was the Nasdaq composite, which ended down 5.33 points, or 0.1 percent, to 4,242.62.

May was the best month for investors since February. The S&P rose 2.1 percent for the month, while the Dow rose 0.8 percent and the Nasdaq rose 3.1 percent.

Takuya Takahashi, senior strategist at Daiwa Securities Co. in Tokyo, said trading may grow more cautious toward the end of the week ahead of the ECB meeting and the U.S. jobs data, but Tokyo shares were likely to head higher over time.

"The rise may take a day or it may take a week, but it is going up in a natural way," he said. "The perception is becoming more widespread that Tokyo shares are a good deal."

Adding to such sentiments was the yen's weakening, which is a plus for Japanese exporters.

The dollar was trading at 101.99 yen, up 0.22 yen, while the euro was virtually unchanged at $1.362.

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