Nikkei bounces back on futures-driven buying


The Nikkei bounced back modestly Thursday, helped by futures-led buying and a surge in Chinese stocks.

The Nikkei 225 stock average closed up 55.98 points, or 0.39 percent, at 14,472.58, after swinging between positive and negative territories. But the Topix index edged down 0.43 point, or 0.04 percent, to end at 1,194.77.

The benchmark Nikkei opened more than 140 points lower, chiefly due to the yen’s surge against the dollar after U.S. Federal Reserve Chairman Ben Bernanke’s comments eased speculation that the bank may start tapering off its asset-buying program as early as September.

The Tokyo market pared early losses and fluctuated in a narrow range around the previous day’s closing level for the rest of the morning as the yen fell from its earlier high of around ¥98.20 to the dollar in overseas trading.

The Nikkei extended losses in the afternoon as the yen strengthened further on the Bank of Japan’s decision to keep unchanged its monetary policy at a policy-setting meeting that ended Thursday. But the index rebounded into positive territory in late trading, led by index futures and boosted by buying prior to Friday’s fixing of special quotations to settle July options contracts.

“A surge in the Shanghai market relieved investors, prompting purchases of Japanese stocks late in the session,” said Masashi Oguchi of Mito Securities Co.

The firmness of other major Asian stock markets following Bernanke’s comments also helped the Nikkei.

Oguchi added that the BOJ’s upward revision to its assessment on the economy that used the term “recover” for the first time in 2½ years provided additional support for the market.

Following the yen’s surge Thursday, “it may remain on a firm note for a week or two (but) is likely to have only a limited impact on stock prices,” said Yutaka Miura at Mizuho Securities Co.

Losers outnumbered winners 825 to 754 in the first section. Volume edged down to 2.780 billion shares from Wednesday’s 2.782 billion.

JGBs rise further

Japanese government bonds gained Thursday after comments by U.S. Federal Reserve chief Ben Bernanke quelled speculation over an early end to quantitative easing.

The lead September futures contract on 10-year JGBs closed up 0.49 point from Wednesday at 143.12. Turnover grew to 27,519 contracts from 23,436.