Stocks rose sharply Wednesday, buoyed by expectations for a strong earnings recovery at Toyota.
The Nikkei 225 average soared 111.94 points to end at 14,337.31. The Topix rose 9.58 points to 1,192.16, snapping a three-day losing streak.
Selling outpaced buying from the outset after the U.S. Dow Jones industrial average turned moderately lower overnight.
Although the broader Topix soon made it into positive territory thanks to buying on dips, the Nikkei remained sluggish for most of the morning session, pressured by a plunge in Fast Retailing, a heavily weighted component issue, brokers said.
The Nikkei staged a sharp rebound following an NHK report around noon that Toyota would raise its fiscal 2013 group operating profit estimate to ¥2.2 trillion from ¥1.94 trillion thanks to the yen’s weakness, they said. The leading automaker’s earnings revision announcement after the closing bell confirmed the report.
Buying inspired by the report pushed up not only Toyota but other companies that had not been actively bought recently, such as shipping firms and steel-makers, brokers said.
“Investor sentiment was brightened by the news,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
Influenced strongly by Toyota price moves, stocks index futures posted larger gains than the company’s stock did, brokers said.
But the market lost its upward momentum when the index buybacks came to an end, and hovered in a narrow range for the rest of the session.
Investors took to the sidelines to wait for releases of key economic indicators abroad, including U.S. government jobs data for October, due out Friday, Otani said.
Profit-taking emerged after the Nikkei surpassed its 25-day moving average, which stood at 14,324.85 as of Tuesday, in the afternoon, brokers also said.
Winners trounced losers 1,256 to 402 in the first section, while 99 issues were unchanged. Volume fell to 2.582 billion shares from Tuesday’s 2.625 billion.
Toyota climbed about 0.5 percent. Nissan, Mazda and Mitsubishi Motors were buoyant, too.
JGBs take a hit
Japanese government bonds fell Wednesday even though the day’s auction of a new 10-year JGB issue turned out to be solid.
The lead December contract on 10-year JGBs finished down 0.12 point from Tuesday at 144.85.
Volume grew to 28,111 contracts from Tuesday’s 15,150.