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Tokyo stocks turn higher on brisk corporate earnings

JIJI

Stocks turned higher on the Tokyo Stock Exchange Wednesday, backed by purchases reflecting strong corporate earnings in Japan.

The 225-issue Nikkei average climbed 125.98 points, or 0.67 percent, to end at 18,903.02. On Tuesday, the key market gauge fell 170.08 points.

The Topix index of all first-section issues rose 4.08 points, or 0.26 percent, to 1,547.19, after losing 15.88 points the previous day.

The Tokyo market opened higher thanks to buybacks after the previous day’s fall and buying on the back of brisk earnings reports from major Japanese companies, brokers said.

In particular, investors took heart from solid full-year forecasts announced Tuesday by industrial robot manufacturer Fanuc and chip-making equipment-maker Tokyo Electron.

Still, the market’s upside was capped by selling to cash-in gains amid prevailing worries about market overheating after the recent gains as suggested by some technical charts, brokers said.

Many investors took a wait-and-see stance prior to the announcement of a monetary policy decision at the U.S. Federal Reserve’s Federal Open Market Committee meeting later on Wednesday.

The Nikkei average was shored up by gains in heavyweight components with favorable earnings, such as Fanuc, an official at a bank-affiliated brokerage firm said.

As for the FOMC, most analysts expect that the Fed will keep its monetary policy intact. Still, “investors want to figure out the possibility of an interest rate hike in December from Fed Chair (Janet) Yellen’s remarks,” said Nobuyuki Fujimoto, market analyst at SBI Securities Co.

Yellen is scheduled to hold a news conference after the FOMC meeting.

Market players are also keeping a close eye on the Bank of Japan’s monetary policy decision at its policy-setting meeting on Friday.

Expectations for additional easing by the BOJ would increase if industrial production data for September, due out Thursday, turn out weak, an official at a major securities firm said.

Winners outnumbered losers 963 to 796 in the TSE’s first section, while 145 issues were unchanged.

Volume decreased to 1.72 million shares from Tuesday’s 1.90 billion shares.

Mobile carrier SoftBank Group jumped 2.70 percent after its Chinese e-commerce affiliate Alibaba soared in New York trading on Tuesday, boosted by robust July-September earnings, brokers said.

Fanuc surged 4.69 percent and Tokyo Electron rocketed 6.58 percent.

Other mainstay issues, including automaker Toyota, electronics giant Sony and clothing retailer Fast Retailing, were also upbeat.

By contrast, camera maker Canon tumbled 3.24 percent, a day after revising down its full-year earnings forecast due chiefly to a demand fall in China.

Hitachi Construction plunged over 4 percent after the construction machinery maker on Tuesday lowered its estimate for the year to March 2016. Rival Komatsu also fell sharply.

Other major losers included leading technology names Hitachi and Panasonic.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average advanced 90 points to end at 18,930.