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Stocks dip, cut losses as yen’s climb pauses

JIJI

Stocks closed slightly lower Wednesday after cutting early losses with the aid of buying on dips and buybacks thanks to a halt in the yen’s rise.

The 225-issue Nikkei average closed down 28.30 points, or 0.21 percent, at 13,289.32. On Tuesday, the key market gauge plunged 196.58 points. The Topix index of all first-section issues sagged 4.61 points, or 0.42 percent, to end at 1,096.54, after falling 10.82 points the previous day.

The Tokyo market came under selling pressure from the outset of Wednesday’s trading, on the heels of an overnight tumble in U.S. equities attributed to disappointment over the Bank of Japan’s inaction on monetary policy.

The Nikkei average lost more than 300 points to fall below 13,000 shortly after the opening, but resisted slipping further as the yen’s appreciation came to a halt.

The key indexes were stuck in a narrow range for the rest of the morning session in the absence of fresh incentives.

In the afternoon, stocks gradually cut the losses, helped by buying on dips and buybacks on the back of the yen’s weakening against other major currencies, brokers said.

The downside of the Nikkei average was supported by buying of machinery makers and electronics makers, as well as gains in heavily weighted component issues such as Fanuc and Canon, brokers said.

Still, analysts believe the market environment is far from one in which all investors can step up purchases.

In chart analysis, there was no signal suggesting that the market has bottomed out, an official at a domestic brokerage said.

“Today, stock prices swung wildly on speculative selling and buying despite the lack of major market-moving factors. I believe the market will move drastically again tomorrow” prior to Friday’s special quotation-fixing to settle June index futures and options contracts, said Masashi Oguchi of Mito Securities Co.

JGBs lose more ground

Japanese government bonds lost further ground Wednesday, hit by selling from investors who were disappointed at the Bank of Japan’s bond-buying operation.

In interdealer trading in cash JGBs, the yield on the latest 329th 10-year issue with a 0.8 percent coupon rose up to 0.900 percent in the afternoon. But the yield turned to fall later, standing at 0.870 percent in late trading, down from 0.880 percent late Tuesday.