Stocks advanced Wednesday thanks to buying inspired by the yen’s weakness, with the Nikkei 225 average closing above 14,000 for the first time in about a week.
The Nikkei rose 183.16 points to finish at 14,050.16, ending above 14,000 for the first time since Aug. 6. On Tuesday, the key market gauge shot up 347.57 points.
The Topix closed up 14.19 points at 1,171.34 after rising 22.53 points Tuesday.
The market opened on a strong note on the back of the yen’s falls against the dollar.
After the initial buying ran its course, however, stock prices gradually lost stream and slipped into negative territory, weighed down by selling to lock in profits after the previous day’s surge.
In the early afternoon, the Nikkei briefly slipped more than 100 points.
The closely watched index, however, quickly wiped out the losses by midafternoon and extended gains, supported by speculative futures-led purchases amid the yen’s further weakening against the dollar, brokers said.
With most investors away for summer vacation, trading was thin and stock prices were easily swayed by moves of index futures, brokers said.
The robust performance of the market, especially in late Tuesday and Wednesday afternoon trading, reflected “heightened investor hopes for the (second part of) growth strategy” that the government will hammer out in autumn, said Takuya Takahashi, senior market analyst at Daiwa Securities Co.
The expectations were fueled by a newspaper report Tuesday that Prime Minister Shinzo Abe has directed his team to consider cutting the effective corporate tax rate.
The growth strategy is one of the three pillars of Abe’s “Abenomics” economic policies.
Still, a wait-and-see mood is expected to grow as investors will want to see U.S. economic data, such as housing starts in July, due out Friday, brokers said.
Rising issues outnumbered falling ones 1,363 to 296 on the first section,tt while 93 issues were unchanged. Volume increased to 2.226 billion shares from Tuesday’s 1.876 billion.
JGBs edge lower
Japanese government bonds dropped Wednesday as Tokyo stocks fared well.
The lead September contract on 10-year JGBs closed down 0.20 point from Tuesday at 143.94. Volume fell to 17,759 contracts from 21,002.