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Japan Shares Snap 5Day Losing Streak ahead of Olympics Holiday

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TOKYO, July 21 Reuters Japanese shares snapped a fiveday losing streak on Wednesday as investors bought cyclical stocks ahead of a long weekend that will mark the start of the Tokyo 2020 Olympics, following a rebound in U.S. stocks.

Concerns that the event could worsen Japans COVID19 outbreak and lead to political instability have, however, weighed on the market.

The Nikkei share average rose 1.75 to 27,870.66, crossing past the 200day moving average, a key support, of 27,714.

The market will be closed for a national holiday until Monday as Tokyo 2020 Olympic Games begin on Friday.

The broader Topix gained 1.54 to 1,917.85, with all of its 33 industry subindexes rising, led by cyclical shares, such as shippers, airlines and carmakers .

Japan has underperformed global peers yeartodate on the reopening trade but we expect the gap to narrow as the domestic vaccine rollout gathers momentum, said Daisuke Nomoto, Global Head of Japanese Equities at Columbia Threadneedle Investments in Boston.

Japanese domestic economy will benefit from pentup savings and employee compensation back to preCovid levels. Japan will also be a key beneficiary of global recovery and will experience a healthy earnings recovery supported by attractive valuations, he added.

Hopes for the earnings season, which will gather pace from the next week, underpinned the market.

Makers NOK Corp jumped more than 10 after the maker of oil seals bumped up its profit outlook sharply.

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