The Nikkei 225 average retook the 14,000 line for the first time in three weeks Wednesday, pushed up by futures-led buying on the back of a weakening of the yen against the dollar.
The key gauge closed at 14,053.87, up 75.43 points, for the first finish above 14,000 since Aug. 14. The Topix meanwhile climbed 7.12 points to end at 1,156.30.
Both indexes extended their winning streaks to a third session.
Despite Wall Street’s rebound overnight, Tokyo stocks came under profit-taking pressure early Wednesday following a sharp rally the day before.
A strong earthquake in the Tohoku and Kanto regions shortly after the opening bell drove the Nikkei down by more than 130 points.
But it resisted falling further and gradually cut the losses to return to positive territory in the midafternoon thanks to index futures-led buybacks prompted by the yen’s drop against the dollar, brokers said.
“There were no specific buying incentives. The afternoon market upturn was due solely to futures short covering in view of the dollar-yen moves,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
An official at an online brokerage said the market was supported by speculative purchases that emerged after investor sentiment was bolstered by the yen’s weakening and brisk Chinese economic data released in the morning.
Still, analysts are skeptical about the Nikkei’s ability to remain above the 14,000 line.
“I think profit-taking will hit the remaining two sessions this week, as players can’t actively place buy orders before the release of U.S. government jobs data on Friday and the selection of the 2020 Summer Olympic host city on the weekend,” Miura said.
Rising issues outnumbered falling ones 1,019 to 589 on the first section, while 145 issues were unchanged.
Volume dropped to 2.268 billion shares from 2.427 billion Tuesday.
Olympus plunged 2.85 percent following news that a British law-enforcement authority has indicted the company.
JGB futures lose gains
Japanese government bond futures erased their earlier gains to end marginally lower Wednesday as Tokyo stocks reversed morning losses.
The lead September contract on 10-year JGBs closed down 0.04 point from Tuesday at 143.97. Volume fell to 25,431 contracts from 30,820.