Stocks staged a sharp rebound Thursday, helped by buying on dips on the back of a weakening of the yen and a robust Chinese economic indicator.
The Nikkei 225 average closed up 133.88 points, or 1.28 percent, at 10,620.87. On Wednesday, the key market gauge tumbled 222.94 points.
The Topix rose 9.83 points, or 1.11 percent, at 897.62, after falling 13.36 points the previous day.
Both indexes snapped their three-session losing streak.
After showing small ups and downs around the previous day’s closing level in early trading, the Nikkei ended the morning session slightly higher thanks to buying on dips and buybacks after the previous day’s tumble.
In the afternoon, the Nikkei extended gains, bolstered by the yen’s falls and receding worries about the course of the global economy after the HSBC China manufacturing purchasing manager’s index for January topped the boom-or-bust dividing line of 50 for the third consecutive month, brokers said.
The TSE was supported by a technical rebound after the Nikkei tumbled more than 400 points in the three sessions through Wednesday, an official at a major brokerage said.
Nonetheless, analysts agree that hopes for “Abenomics,” or economic and monetary policy promoted by Prime Minister Shinzo Abe, have subsided temporarily after he took a series of concrete policy measures. They include an emergency economic stimulus package and a joint statement with the Bank of Japan pledging to overcome chronic deflation by setting a 2 percent price target.
“Now is the time to evaluate the reality,” including the effects of those policy measures, said Hideyuki Suzuki, general manager and head of the investment market research department at SBI Securities Co. “I believe stocks will enter a correction phase for about a month.”
Winners far exceeded losers 1,089 to 470 in the first section, while 137 issues were unchanged. Volume decreased to 3.271 billion shares from Wednesday’s 3.378 billion.
JGB futures rise
Japanese government bond futures rose modestly Thursday, pushed up by late buying.
The lead March contract on 10-year JGBs gained 0.08 point from Wednesday to end at 144.45.
Volume increased to 41,645 contracts from 30,793 contracts in the previous session.