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Nikkei fights back from deep fall to end up a bit

JIJI

The Nikkei 225 average ended almost flat Thursday after fluctuating sharply on swings in the yen.

The key benchmark ended the day 9.20 points higher at 10,609.64. On Wednesday, the Nikkei tumbled 278.64 points.

The Topix rose 2.35 points to end at 890.46 after falling 18.11 points the previous day.

The TSE got off to a firm start as export-oriented stocks attracted buying after their sharp falls the previous day and a retreat in the yen’s value.

The market lost momentum later due to accelerated buybacks of yen. The Nikkei sank deeply into negative territory, briefly dropping below 10,500 in the afternoon in line with a tumble in index futures before showing resilience toward the end of the session.

Investors’ wariness over the yen’s move has grown after a series of warnings against excessive weakness of the currency from senior officials in Japan and abroad, brokers said.

On the heels of remarks on the yen from senior Japanese leaders earlier this week, a high-ranking official in the Russian central bank reportedly said Wednesday that Japan is weakening the yen and that other countries may follow suit with their own currencies.

The Nikkei was pulled down sharply in early afternoon trading partly by arbitrage dealing to sell cash stocks and buy back index futures at the same time, which was prompted by the tumble in index futures, brokers said.

“Over the past two days, both foreign exchange and stock markets moved to remove a feeling of overheating in the near term,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

He said the Nikkei is unlikely to fall substantially further until early next week as hopes for the Bank of Japan’s two-day policy meeting starting Monday are expected to support the market.

Despite gains in the key indexes, losers outnumbered winners 984 to 607 in the first section, while 100 issues were unchanged. Volume rose to 3.934 billion shares from Wednesday’s 3.648 billion.

JGBs edge higher

Japanese government bonds rose Thursday as stock prices fell into minus territory briefly.

The lead March futures contract on 10-year JGBs gained 0.07 point from Wednesday to close at 144.38.

Turnover ballooned to 51,932 contracts from 43,539 contracts in the previous session.