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Nikkei turns north following Wall Street rebound

JIJI

The Nikkei 225 average bounced back Thursday, snapping a three-day losing streak thanks to gains on Wall Street overnight and a pause in the yen’s strengthening.

The key index jumped 121.25 points to finish at 13,459.71.

The Topix rose for the first time in four sessions to end 2.48 points higher at 1,116.51.

The market got off to a brisk start with resource-related issues and some export-oriented stocks drawing popularity in particular, after the Dow Jones industrial average closed higher for the first time in three sessions Wednesday.

The Nikkei climbed more than 120 points in early trading, led by index futures. But the overall market turned top-heavy as concerns over possible military intervention in Syria by the United States and its European allies weighed on the market.

After erasing a substantial portion of its early gains, the key market yardstick became buoyant again and accelerated the upswing in the afternoon on buying encouraged by rallies on Asian markets.

Many analysts agree that the U.S. is unlikely to take any action that would balloon military spending because the country’s debt is already close to the ceiling.

“Our main scenario is that any military action against Syria would be carried out in a short period, exerting only a limited impact on the crude oil market,” said Yasuhiko Kuramochi, chief strategist at Mizuho Securities Co.

Still, players will remain jittery about geopolitical risks, some analysts pointed out.

Hiroichi Nishi, equity general manager at SMBC Nikko Securities Co., said the TSE’s upside has been “capped by concerns over a possible early start of the U.S. Federal Reserve’s cutback on its quantitative easing and over the course of emerging economies.”

But Thursday’s sharp gains in stocks in some Asian countries relieved investors, he added.

Despite the key index’s advance, losers edged winners 818 to 769 on the first section, while 166 issues were unchanged. Volume fell to 1.810 billion shares from 1.979 billion shares Wednesday.

JGBs rise further

Japanese government bonds advanced further Thursday thanks to continued flight-to-quality buying on the back of rising tensions over Syria.

The lead September contract on 10-year JGBs finished up 0.12 point from Wednesday at 144.41. Volume totaled 16,851 contracts, compared with 24,237.