Tokyo Nikkei 225 up 1.26% at 40,580 points (Il Sole 24 Ore Radiocor) - Tokyo, 03 Jul - Japanese shares closed sharply higher, soaring for a second straight session and leading the gains amid strong Asian markets.

The Nikkei index closed up 1.26% at 40,580 points, climbing near record highs hit in March and breaking above the 40,000 level for the first time in three months.

On the data front, in June Japan's purchasing managers' index (PMI) for the services sector fell to 49.4 from 53.8 in May, according to data released by S&P Global and its partner au Jibun Bank. The final reading is below the preliminary estimate of 49.8 and ended a 21-month sequence of continuous expansion which peaked with a survey-record pace of growth back in May 2023.

The composite output index, a weighted average of services PMI and manufacturing output, slipped to 49.7 from 52.6. The preliminary reading was 50.0 for June.

On Monday the government unexpectedly revised first quarter gross domestic product data to show a much deeper contraction than initially expected, highlighting growing challenges for the Japanese economy.

Prospects of a weaker economy however could ease pressure on the Bank of Japan to increase interest rates.

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(RADIOCOR) 03-07-24 08:31:16 (0150) 5 NNNN