Stocks climbed for the first time in six sessions Monday, thanks to buybacks inspired by higher U.S. equities.
The Nikkei 225 average closed up 132.78 points at 15,296.82. On Friday, the key market gauge slipped 52.43 points.
The Topix climbed 10.27 points to end at 1,265.46 after falling 4.06 points Friday.
The TSE kicked off the week with modest gains, helped by rises in U.S. and major European equities late last week.
After the initial buying ran its course, however, stock prices moved in a narrow range amid a dearth of fresh incentives, brokers said.
In the afternoon, however, the Nikkei extended gains to briefly surge more than 160 points, led by speculative futures-led purchases on the back of the yen’s moderate weakening against other major currencies, brokers said.
Buying also stemmed from hopes for solid New York stocks later Monday following gains in U.S. stock index futures on the GLOBEX 24-hour trading system, brokers said.
“Despite the absence of powerful incentives to drive up stock prices, the Tokyo market was surprisingly strong,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
Several analysts said the Nikkei is expected to test its upside at around 15,400 to 15,500 as the index topped its 25-day moving average, which stood at 15,217.26 as of Friday. Others said, however, that Monday’s rally was no more than a technical rebound after the Nikkei lost for five straight session.
Both trading value and volume remained relatively low on Monday, with investors waiting for two key events this week: the Bank of Japan’s Policy Board meeting through Tuesday and U.S. Federal Reserve Chairwoman Janet Yellen’s congressional testimony on Tuesday and Wednesday, brokers said.
“I think it’s a question of whether Tokyo stocks can maintain a firm note for the rest of the week,” Suzuki said.
Rising issues outnumbered falling ones 1,361 to 358 in the first section, while 96 issues were unchanged.
Volume decreased to 1.926 billion shares from Friday’s 2.127 billion.
NTT jumped 2.64 percent to rewrite its year-to-date high as investors regarded the issue as undervalued, brokers said. Rival telecommunications carriers SoftBank, KDDI and NTT DoCoMo were also buoyant.
Power utilities Hokkaido Electric and Kyushu Electric enjoyed handsome gains.
Also on the plus side were automakers Toyota and Honda, as well as tire maker Bridgestone and robot maker Fanuc.
On the other hand, shipping firms Nippon Yusen and Kawasaki Kisen were downbeat, along with nonbank lender Aiful and clothing retailer Fast Retailing.
Realtors Sumitomo Realty and Mitsubishi Estate edged lower.