Stocks staged a sharp rebound on the Tokyo Stock Exchange Wednesday, backed by buybacks after their recent tumble.
The 225-issue Nikkei average climbed 484.01 points, or 2.61 percent, to end at 19,049.91. On Tuesday, the key market gauge plunged 317.52 points.
The Topix index of all first-section issues grew 38.17 points, or 2.54 percent, to close at 1,540.72, after falling 25.33 points the previous day.
A wide range of issues, such as mega-bank groups and automakers, attracted buybacks after U.S. and major European stock markets climbed overnight, reflecting a rise in crude oil prices.
Investors also took heart from a fall in the yen’s value notably against the dollar.
Particularly, beaten-down issues drew buying after the Nikkei average dived some 664 points in two sessions through Tuesday.
Foreign investors stepped up buying of large-cap issues that have a huge impact on the Nikkei average on the back of solid performances of other Asian stocks, brokers said.
Still, a wait-and-see mood increased in the afternoon as the U.S. Federal Reserve is scheduled to announce a monetary policy decision later on Wednesday, brokers said.
“Uncertainty remains strong over the FOMC results,” Kenichi Hirano, market analyst at K Asset Co., said, referring to the Fed’s policy-setting Federal Open Market Committee.
“Investors have priced in the Fed’s possible interest rate hike, but they want to know a schedule of additional rate increases,” he said.
Hirano added that if the Fed keeps rates unchanged this time, “the yen is likely to rise rapidly against the dollar,” which would dampen mainstay export-oriented names.
Expectations are high for a year-end stock market rally after the closely watched event ends, brokers said. “After the FOMC meeting, the Nikkei will begin to retake 20,000” going into the end of this year, Hirano said.
Rising issues outnumbered falling ones 1,641 to 225 in the TSE’s first section, while 60 issues were unchanged.
Volume increased to 2.13 billion shares from Tuesday’s 2.07 billion shares.
In the financial sector, mega-bank group Mitsubishi UFJ, insurer Dai-ichi Life and brokerage firm Nomura enjoyed gains after U.S. financial issues rose on Tuesday, brokers said.
Square Enix jumped 4.57 percent after a foreign-affiliated brokerage firm raised its stock price target for the game company on Tuesday, brokers said.
By contrast, Japan Airlines tumbled 2.33 percent, a day after the airline said it will suspend its flights linking Narita International Airport near Tokyo and Paris between Jan. 12 and Feb. 29 due to a fall in demand following last month’s terror attacks in the French capital.
Also on the minus side were online shopping mall operator Rakuten, electronics-maker Sharp, travel agency H.I.S. and toy-maker Tomy.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 540 points to end at 19,090.