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Nikkei up on foreign buying of mainstay issues

JIJI

Stocks rose Tuesday, helped by brisk purchases of mainstay issues by foreign investors.

The Nikkei 225 average closed up 120.47 points at 14,778.51. On Monday, the key market gauge climbed 68.13 points.

The Topix gained 6.19 points to end at 1,222.72 after rising 4.55 points Monday.

Selling outpaced buying from the outset after the yen strengthened against the dollar and New York equities were lackluster overnight, brokers said.

The key TSE indexes rebounded into positive territory on the back of a halt in the yen’s appreciation and buoyant Shanghai equities, brokers said.

The Nikkei gained further ground late in the morning session, thanks to futures-led purchases, brokers said.

In afternoon trading, prices remained on a firm note and gradually extended gains toward the close. The market was bolstered by steady performances of Asian equities and buying by foreign investors for mainstay and heavily weighted component issues, such as mobile carrier Softbank and electronics maker Sony, brokers said.

The end of the dividend Diet after the Liberal Democratic Party scored a landslide victory Sunday erased investor concerns that the administration will be unable to move policy measures forward, brokers said.

Investor sentiment also improved after the government raised its basic economic assessment for the third consecutive month, brokers said.

“Optimism spread over the course of Japan’s economy,” said Hiroaki Hiwada, senior strategist at Toyo Securities Co. “Expectations are high for politics, the economy and corporate earnings in the nation.”

Still, investors will find it difficult to step up purchases before they see quarterly earnings reports from key Japanese companies, brokers said. The release of corporate scorecards will peak next week.

Rising issues far exceeded falling ones 1,041 to 573 on the first section, while 139 issues were unchanged. Volume decreased to 2.361 billion shares from 2.472 billion Monday.

JGBs gain ground

Japanese government bonds rose Tuesday, with a benchmark 10-year JGB yield setting a new two-month low.

The yield on the benchmark 329th 10-year JGB issue with a 0.8 percent coupon declined as low as 0.770 percent, the lowest level for a key 10-year JGB yield since May 14.