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Japan's Nikkei surges on revised growth figures

LONDON An upward revision to Japanese growth helped the country's Nikkei stock index surge Monday while markets elsewhere remained solid following last week's better-than-expected U.S. jobs data.

The Nikkei soared 4.9 percent to 13,514.20 after the first-quarter growth rate of the world's number 3 economy was revised up from an annualized rate of 3.5 percent to 4.1 percent. The Nikkei's rise more or less made up for the retreat suffered by Japanese stocks last week but the scale of the advance shows just how volatile the index has become.

After a stellar first few months of the year, which sent the Nikkei up to five-year highs, the index has become increasingly volatile and lost over 6 percent of its value last week. The key consideration for investors is whether the big monetary stimulus announced this year by the Bank of Japan to get the country out of its two-decade stagnation will work. Investors have grown more cautious of late but the growth figures, though backward-looking, provided some comfort ahead of Tuesday's policy statement from the BoJ.

Elsewhere, last Friday's U.S. payrolls figures, which showed 175,000 jobs added in May, remained the focus and helped shore up shares in Europe and futures trading on Wall Street.

In Europe, the FTSE 100 index of leading British shares was 0.1 percent higher at 6,415 while Germany's DAX rose 0.9 percent to 8.325. The CAC-40 in France was 0.1 percent lower at 3,871.

U.S. stocks were poised to post modest gains at the open with Dow futures up 0.3 percent and the broader S&P 500 futures 0.4 percent higher.

With no scheduled U.S. economic news due later Monday, investors will likely continue to digest the payrolls figures. Though the increase was a little higher than forecasts, it wasn't so high as to prompt investors to price in the prospect of an imminent change in U.S. monetary policy. Over recent weeks, investors have grown fearful that the Federal Reserve will reduce the amount of financial assets it buys in the markets - so-called tapering.

"These were not figures that would have been taken as being particular positive for risk assets a few weeks ago but they were probably in the range of 'not too hot, not too cold' which was a relief for the markets," said Gary Jenkins, managing director of Swordfish Research. "Not strong enough to encourage the Fed to begin tapering anytime soon but not so cold as to lead to concerns about the economy slowing."

The prospect of unchanged Fed policy in the near-term weighed on the dollar on Friday but the currency has found renewed support Monday -- while the euro was flat at $1.3217, the dollar was 1.1 percent higher at 98.65 yen.

Elsewhere in Asia, Hong Kong's Hang Seng index added 0.2 percent to 21,615.09 while South Korea's Kospi gained 0.5 percent to 1,932.70. Monday's gains came despite China's weekend data that showed trade, retail sales and other activity in May weaker than expected, fueling concerns about the country's shaky economic recovery. Markets in China were closed for holidays.

Oil prices gave up some recent gains, with the benchmark New York rate down 41 cents at $95.62 per barrel.

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