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Nikkei snaps four-day slide as yen rise pauses

JIJI

The Nikkei 225 average staged a rebound Tuesday thanks to a halt of the yen’s rise and buybacks after sharp falls over the past four sessions.

The Nikkei closed up 208.69 points, or 1.53 percent, at 13,869.82 after plunging 468.85 points Monday. The key market gauge slid 1,117.38 points, or 7.56 percent, over the previous four trading days.

The broader Topix also rose for the first time in five sessions, ending 20.08 points, or 1.78 percent, higher at 1,148.53. The index shed 38.61 points Monday.

After a weak start, the Nikkei bounced back quickly, led by some mainstay issues, including Toyota, that had showed signs of being oversold.

The key market yardstick extended gains in the afternoon on the back of the yen’s easing against the dollar and the euro and firmness of Asian markets.

Following the Nikkei’s four-day losing streak, some technical indicators signaled that the market has entered a “buy” zone, raising hopes for a technical rebound, brokers said.

“The Nikkei average accelerated its upswing in the afternoon thanks partly to news that the People’s Bank of China has injected cash into the country’s money market” for the first time since February, said Masashi Oguchi of Mito Securities Co.’s investment information department.

Some investors were in a wait-and-see mood ahead of the peak of Japanese corporate earnings reports for April-June on Wednesday and the U.S. Federal Reserve’s two-day policy-setting meeting starting later Tuesday, as well as key U.S. economic indicators due out later this week, brokers said.

Pointing out that the recent sharp fall was attributed to the market’s excessive expectations for robust corporate performances, Oguchi said that “a string of weak earnings reports from major companies such as Canon, Nissan and JFE Holdings helped the market to calm down.”

“Investors are expected to react to individual earnings reports as the overall market is not in the mood for buying at the moment,” he added.

JGBs barely budge

Japanese government bonds moved little Tuesday amid a wait-and-see mood ahead of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting through Wednesday.

In futures trading, the lead September contract on 10-year JGBs closed down 0.01 point from Monday at 143.62.