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Nikkei rises on unexpected news from Europe

JIJI

Stocks advanced sharply Tuesday, helped by a wave of buying on the back of the yen’s weakness and good news from Europe.

The Nikkei 225 average closed up 405.52 points, or 2.99 percent, at the day’s high of 13,978.44.

The Topix climbed 31.40 points, or 2.81 percent, to end at 1,149.18, also the day’s high.

Stocks attracted purchases from the outset after major European equity markets gained ground and the yen weakened against the dollar, brokers said.

A number of mainstay issues, such as automakers, electronics makers and banking groups, drew buying interest.

In the afternoon, the key indexes extended gains thanks to futures-led purchases, with investor sentiment also bolstered by brisk performances of Asian stock markets, brokers said.

Easing worries about the situation in Syria and strong economic data released in China and Europe triggered Tuesday’s massive purchases, brokers said.

Notably, a strong reading of the eurozone manufacturing industry purchasing managers’ index for August, released Monday, was a “positive surprise” for investors, said Masashi Oguchi of Mito Securities Co.’s investment information department.

“No one expected the sluggish European economy to show a sign of recovery. Investors considered the eurozone economy has bottomed out,” Oguchi said.

In addition, expectations grew that Wall Street would bounce back sharply later Tuesday in view of higher U.S. stock index futures on the GLOBEX 24-hour trading system, brokers said. The U.S. market was closed Monday for Labor Day.

Rising issues far exceeded falling ones 1,629 to 88 on the first section, while 34 issues were unchanged.

Volume increased to 2.427 billion shares from 1.853 billion Monday.

Kansai Electric surged 8.08 percent after a team of experts from the Nuclear Regulation Authority concluded Monday that a crush zone under a key facility of the power firm’s Oi nuclear plant in Fukui Prefecture is not an active fault.

JGB futures weaken

Japanese government bond futures failed to become buoyant Tuesday, weighed down by the surge in Tokyo stocks.

The lead September contract on 10-year JGBs closed down 0.16 point from Monday at 144.01.

Volume doubled to 30,820 contracts from 14,966.