Stocks bounced back sharply Thursday, buoyed by massive buybacks following a strong Chinese economic indicator.
The Nikkei 225 average ended up 295.62 points, or 2.11 percent, at 14,337.79. On Wednesday, the key market gauge sagged 33.08 points.
The Topix climbed 19.29 points, or 1.68 percent, to 1,169.34 after falling 3.33 points Wednesday.
The TSE opened higher on buybacks after the Dow Jones industrial average rebounded overnight.
The Nikkei accelerated its upswing when the HSBC China Manufacturing Purchasing Managers Index for May, released in the morning, turned out better than market expectations, brokers said. The PMI stood at 49.7, against a market estimate of 48.1.
The Nikkei successfully ended above its 25-day moving average, which stood at 14,278.85 as of Wednesday. In recent sessions, the upside of the index was capped by the moving average, brokers said.
The Nikkei average is now ready to try around its 75- and 200-day moving averages, which are around 14,500 to 14,600, brokers said.
Still, analysts agree that additional incentives, including the yen’s further depreciation and the Abe administration’s economic growth strategy, would be necessary to drive up stock prices further.
Rising issues overwhelmed falling ones 1,619 to 140 in the first section, while 51 issues were unchanged.
Volume ballooned to 2.345 billion shares from Wednesday’s 1.795 billion.
Brokerage firms, which have been oversold, attracted buybacks. Among them were Nomura, Daiwa and SBI Holdings.
Rough day for JGBs
Japanese government bonds lost ground Thursday on the surge in stock prices.
The lead June futures contract on 10-year JGBs ended down 0.08 point from Wednesday at 145.14.
Volume rose to 22,567 contracts from 18,745.
In late interdealer trading in cash JGBs, the yield on the latest 333rd 10-year issue with a 0.6 percent coupon stood at 0.600 percent, up from 0.590 percent late Wednesday.
JGBs were under pressure as the benchmark 225-issue Nikkei stock average rose over 300 points at one point, but JGBs’ downside was limited amid a lack of fresh clues.