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Market Scramble: Slimmer inventories stoke hopes for stock rally

Analysts see industries entering 'recovery phase' of cycle

NH Foods, the company behind the Nipponham brand of sausages, has slashed inventory over the past year, feeding hefty share-price gains.

TOKYO -- Efforts to cut inventory are paying off for Japan's manufacturers as shipments start to climb, drawing investors with the promise of an earnings upturn and driving broad share-price gains.

The Nikkei Stock Average overcame a slow morning Monday to close up 0.15% at 19,633, its highest since the beginning of 2016. Falling oil prices propelled buying of utilities and air transportation shares. But most in demand were issues like warehouse operators and chemical companies, which are sensitive to broad economic health.

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