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Nikkei rises on buybacks and higher futures

JIJI

Stocks overcame early weakness to close higher Thursday, helped by buybacks in the afternoon on the back of higher index futures.

The Nikkei 225 average climbed 1.01 percent to close at 14,622.89 on a gain of 145.73 points. The Topix found enough strength to rise 0.41 percent, a rise of 4.83 points, and ended at 1,176.90.

The market came under selling pressure on the heels of an overnight drop in U.S. stocks and an appreciation of the yen, with the Nikkei briefly tumbling nearly 250 points.

Prices were also dragged down as shares of companies closing their books in March went ex-dividend on Thursday. The ex-dividend impact on the Nikkei was some 100 points, brokers said.

The benchmark popped up into positive territory in early afternoon trading, thanks to buybacks as the yen weakened against the dollar and the euro. It accelerated its upswing toward the close, driven by a wave of futures-led purchases, brokers said.

The key indexes were also shored up by window-dressing purchases by Japanese institutional investors prior to the end of fiscal 2013 on Monday, brokers said.

The fact that the Nikkei more than made up the ex-dividend impact “boosted investor sentiment,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

The benchmark index also ended above its 200-day moving average, which stood at 14,513.12 as of Wednesday. The moving average had weighed down the upside of the index in recent sessions, brokers said.

“The point is whether the Nikkei can stay above the moving average,” Miura said.

Rising issues outpaced falling ones 920 to 756 in the first section, while 99 issues were unchanged.

Volume increased to 2.583 billion shares from Wednesday’s 2.444 billion.

Seven & I Holdings surged 5.12 percent following media reports Thursday that its convenience store unit, Seven-Eleven Japan Co., will open 500 outlets at train stations in western Japan through a tie-up with JR West. The railway operator meanwhile edged lower.

JGB futures move little

Japanese government bond futures ended flat on Thursday.

The lead June contract on 10-year JGBs closed at 144.71, unchanged from Wednesday.