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Nikkei rebound aided by yen being talked down

JIJI

The Nikkei 225 average rose Thursday, helped by buybacks on the back of the yen’s weakening.

The benchmark index gained 55.87 points to close at 11,307.28. On Wednesday, the Nikkei tumbled 117.71 points.

The Topix, however, sagged 2.14 points to end at 954.88 after losing 11.48 points Wednesday.

After opening slightly higher, the Nikkei gradually extended gains, supported by the yen’s easing, brokers said. The yen retreated after Kazumasa Iwata, former deputy governor of the Bank of Japan, said in the morning that the yen’s strength needs to be corrected if Japan is going to achieve its inflation target of 2 percent.

The outcome of the BOJ’s two-day Policy Board meeting, announced in the early afternoon, had little impact on stock prices as it was within expectations. The bank upgraded its assessment of the economy and kept its monetary policy unchanged.

The Nikkei was stuck in a stalemate for the rest of the afternoon in the absence of fresh incentives, brokers said.

It briefly rose more than 100 points soon after the BOJ’s decisions were announced, because “investors took heart from the BOJ’s upgrade of its economic assessment,” said Masashi Oguchi of Mito Securities Co.’s investment information department.

“There are no downside risks (to the market) until mid-March,” when the new BOJ leadership team is launched, Oguchi said. “Expectations for new BOJ leaders are likely to continue supporting the Tokyo market.”

Meanwhile, worse than expected gross domestic product data for October-December, released just before the opening bell, somewhat weighed down the topside of stock prices in the morning, but the impact was limited, brokers said.

In the third quarter of fiscal 2012, seasonally adjusted GDP fell a real 0.1 percent from the previous quarter, down for the third consecutive quarter, Cabinet Office data show.

Losers outnumbered winners 960 to 636 in the first section, while 102 issues were unchanged. Volume decreased slightly to 3.663 billion shares from 3.812 billion Wednesday.

JGBs take a hit

Japanese government bonds fell back Thursday, weighed down by an overnight fall in U.S. Treasury bonds and a rise in Tokyo stocks on the yen’s weakening.

The lead March futures contract on 10-year JGBs closed down 0.34 point from Wednesday at 144.04. Volume swelled to 45,990 contracts from 27,076.