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Tokyo stocks rebound on buying on dips

JIJI

Stocks turned higher on the Tokyo Stock Exchange Friday thanks to buying on dips after recent falls.

The 225-issue Nikkei average gained 183.93 points, or 0.97 percent, to finish at 19,230.48. On Thursday, the key market gauge retreated 254.52 points.

The Topix index of all first-section issues ended up 9.16 points, or 0.59 percent, at 1,549.51, after falling 15.23 points the previous day.

Stocks initially came under pressure from selling related to Friday’s special quotation fixing to settle December index futures and options contracts.

But investors moved to buy undervalued issues after a three-day decline in the key market gauges, sending stocks bouncing back.

Sentiment improved on the back of an overnight rally in U.S. equities, brokers said.

Large-cap issues, such as exporters, attracted buybacks, briefly pushing up the Nikkei average by more than 230 points in the morning session.

The yen’s weakening against the dollar also helped lift the market, according to brokers.

“But the gains were nothing but a technical rally after the Nikkei average retreated to nearly 19,000,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.

The market’s topside was capped by a wait-and-see mood ahead of key economic events, such as the release set for Saturday of China’s industrial output data for November and the U.S. Federal Reserve’s policy-setting meeting next week, brokers said.

Worries about falling crude oil prices linger, though brokers see lower crude prices as generally beneficial for Japanese companies.

In addition, an official at a bank-affiliated securities firm said, downward pressure on prices from lower crude prices leads to hopes for additional monetary easing by the Bank of Japan.

Such expectations are likely to support the market’s downside, brokers said.

Rising issues outnumbered falling ones 1,260 to 547 in the TSE’s first section, while 117 issues were unchanged.

Volume grew to 2.41 billion shares from Thursday’s 1.87 billion shares.

Automakers Toyota and Honda, tire producer Bridgestone, electronics manufacturer Sony, industrial robot maker Fanuc and air conditioner maker Daikin gained ground.

Also on the plus side were clothing store chain operator Fast Retailing, airlines ANA and JAL, mobile phone carrier SoftBank Group and drug maker Ono Pharmaceutical.

Sharp attracted buybacks on news that the electronics maker’s main creditor banks plan to offer additional financial support worth several hundreds of billions of yen.

By contrast, seafood producer Maruha Nichiro, insurer Tokio Marine and trading house Mitsui met with selling.

Sekisui House plunged, weighed down partly by selling to lock in gains, after the home builder kept its full-year earnings estimates unchanged on Thursday.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was up 200 points to close at 19,210.