Nikkei ekes out minor rise on buying on dips


Stocks gained again Wednesday, helped by buying on dips for a wide range of issues after recent heavy losses.

The Nikkei 225 average closed up 14.48 points at 14,326.46. On Tuesday, the key gauge rose 169.33 points. The Topix grew 10.60 points to end at 1,178.87 after rising 14.20 points the previous day.

The Nikkei surged 200 points and rose above 14,500 at the outset of trading after the Dow Jones industrial average rewrote its record closing high Tuesday.

Behind the Dow’s rise were strong U.S. economic indicators, such as the consumer confidence index for May and the S&P/Case-Shiller home price index for March, both released Tuesday.

After the initial buying ran its course, the Nikkei gradually lost steam and slipped into negative territory, as large-lot selling hit index futures, and moved around the previous day’s closing level for the rest of the morning.

Stock prices resumed rising in the afternoon thanks to buying on dips on the back of steady performances of other Asian equities, as well as the yen’s weakening against other major currencies, brokers said.

But the Nikkei cut its gains and briefly sank into minus territory in late trading, pressured by selling of its heavily weighted component issues, including Fast Retailing and Softbank, brokers said.

The fall in the late session also came after selling of index futures, brokers said.

Analysts believe stock prices will calm down soon after their recent wild ups and downs.

“Investors still found it difficult to buy stocks in earnest,” Masashi Oguchi of Mito Securities Co.’s investment information department said. “Foreign investors, who are major players of the Tokyo market, are concerned about U.S. Federal Reserve officials’ remarks on strategies to exit from quantitative monetary policy.”

But he added, “I believe the Nikkei’s downside has already been consolidated at 14,000 or 13,943,” an intraday low marked Tuesday.

Rising issues topped falling ones 1,288 to 342 on the first section, while 82 issues were unchanged. Volume fell to 3.910 billion from Tuesday’s 4.205 billion.

Rough day for JGBs

Japanese government bonds lost further ground Wednesday, dampened by firmer stocks.

The yield on the latest 328th 10-year JGBs with a 0.6 percent coupon came to 0.935 percent in late interdealer cash trading, up from 0.905 percent late Tuesday, after rising up to 0.965 percent early in the morning.