Stocks closed lower on the Tokyo Stock Exchange on Tuesday, pressured by a market slump in China.
The Nikkei lost 76.98 points, or 0.42 percent, to end at 18,374.00. On Monday, the average plunged 582.73 points.
The Topix finished down 4.96 points, or 0.33 percent, at 1,504.71, after falling 37.63 points the previous day.
The Tokyo market opened weaker, weighed by a global sell-off triggered by dismal Chinese economic data released Monday. But stocks spurted toward the morning close thanks to buybacks of undervalued stocks.
Investor worries somewhat receded as the benchmark price index in the Shanghai market rapidly cut losses, brokers said. A pause in the yen’s appreciation also encouraged buying, they added.
In the afternoon, stocks grew top-heavy, and sank into negative territory toward the day’s closing as the Shanghai market took a downturn.
“Although Tuesday’s market remained vulnerable to Chinese stock moves, activated buying on dips after the previous day’s plunge limited losses,” said Hiroaki Hiwada, strategist at Toyo Securities Co.
The two-day drop, which pushed down the Nikkei average below 18,500, provides investors a good opportunity for bargain hunting, Hiwada added.
But optimism cannot be warranted, some brokers said, citing heightened tensions in the Middle East and rekindled concerns over the course of the U.S. economy after the release on Monday of the Institute for Supply Management’s weaker-than-expected manufacturing business index for December.
In addition, the dollar’s weakening below ¥120 has prompted investors to worry about export-oriented Japanese firms’ earnings, other brokers noted.
Falling issues outnumbered rising ones 1,009 to 796 in the TSE’s first section, while 130 issues were unchanged.
Volume fell to 1,923 million shares, from Monday’s 1,986 million shares.
Chinese-related issues were battered, among them electronics parts producer Murata Manufacturing, industrial robot maker Fanuc, steel-maker Nippon Steel & Sumitomo Metal, daily goods manufacturer Kao and machinery maker Komatsu.
Automakers Toyota, Fuji Heavy and Honda were also downbeat on growing concerns about their sales amid prevailing uncertainty over the course of the global economy.
Other major losers included drug makers Ono Pharmaceutical, Shionogi and Eisai, insurers Dai-ichi Life and Tokio Marine, banking group Mizuho and clothing store chain operator Fast Retailing.
By contrast, realtors Mitsui Fudosan and Sumitomo Realty, Nippon Telegraph and Telephone, mobile phone carrier KDDI and railway operator JR East were buoyant.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average lost 20 points to close at 18,360.