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Nikkei rises as analysts predict wild fluctuations

JIJI

Stocks staged a sharp rebound Tuesday, getting help from buybacks and a weakening of the yen.

The Nikkei 225 average closed up 143.02 points at the day’s high of 14,401.06, a day after plunging 208.12 points.

The Topix rose 8.92 points to end at the day’s high of 1,193.66 after falling 11.43 points Monday.

The TSE opened with modest losses on the heels of an overnight drop in U.S. equities.

The key indexes extended losses as selling pressure grew for mainstay issues such as automakers, electronics makers and banking groups, brokers said.

The Nikkei briefly tumbled more than 200 points with investor sentiment hurt by the dollar’s brief slide below ¥98, brokers said.

In early afternoon trading, however, the indexes rapidly trimmed losses and popped up into plus territory thanks to buying of exchange-traded funds by the Bank of Japan after the Topix ended the morning down more than 1 percent, brokers said.

Stock prices were also supported by buybacks after the dollar rebounded above ¥98 in the middle of the afternoon session, brokers said.

Investor sentiment was also bolstered after Shanghai stocks turned into plus territory, brokers said.

Buybacks and buying on dips shored up the market when the Nikkei fell close to the psychologically important 14,000 level, brokers said.

In the absence of fresh incentives, “stock prices were following the yen’s moves,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

Ahead of Friday’s special quotation fixing to settle August options contracts, “the Nikkei average is expected to swing wildly between 14,000 and 14,500,” Miura said.

Rising issues far exceeded falling ones 1,130 to 487 on the first section, while 136 issues were unchanged.

Volume increased to 2.265 billion shares from 1.996 billion Monday.

Automaker Honda turned into positive territory in the afternoon. Toyota, Mazda and Nissan were also buoyant.

JGBs head lower

Japanese government bonds took a downturn Tuesday, weighed by late selling stemming from stocks’ sharp rally.

The lead September futures contract on 10-year JGBs lost 0.06 point from Monday to end at 143.66.

Volume fell to 12,029 contracts from 15,461.