Japan shares close higher despite sudden economic downturn

Japanese stocks rose on Tuesday, with investors holding on to shares that fell sharply, even as data showed a surprising economic contraction.

The Nikkei index rose 0.1 percent to close at 27,990.17 points, while the broader Topix index rose 0.37 percent to 1964.22.

Japan’s economy unexpectedly contracted for the first time in a year in the third quarter, which added to the uncertainty over the outlook for the economy as household and corporate consumption weighed on the risks of a global recession, a weak yen and higher import costs.

Recruit Holdings shares fell 6.67 percent, becoming the biggest loser on the Nikkei index, after the employment agency announced disappointing profits for investors for the first half. Advertising giant Dentsu Group lost 5.96 percent.

Shares of 143 companies listed on the Nikkei rose, 143 others declined, and two shares stabilized.

Banking shares rose 2.31 percent, driven by strong earnings from Sumitomo Mitsui Financial Group and Mizuho Financial Group in the second quarter.

Sumitomo Mitsui shares rose 4.17 percent, and Mizuho shares rose 1.3 percent.

Shinoji Pharmaceuticals rose 2.03 percent, after a report that the Japanese government will re-evaluate a drug for Covid-19 produced by the company later this month in order to grant it approval for emergency use.

Shares of SoftBank Investment Technology Group rose 1.3 percent after recording on Monday the biggest daily loss in more than two and a half years.