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Nikkei snaps six-day losing streak on massive buybacks

JIJI

The benchmark Nikkei average snapped its six-session losing streak on the Tokyo Stock Exchange Wednesday, buoyed by aggressive buybacks of mainstay large-cap issues.

The 225-issue Nikkei average jumped 496.67 points, or 2.88 percent, to end at 17,715.63. On Tuesday, the key market gauge tumbled 479.00 points.

The TOPIX index of all first-section issues climbed 40.14 points, or 2.86 percent, to close at 1,442.09, after falling 45.37 points the previous day.

The Tokyo market drew active buybacks from the outset of Wednesday’s trading after the Nikkei average plunged some 1,800 points in the first six sessions of this year through Tuesday.

Wall Street’s rise and the depreciation of the yen against other major currencies shored up stock prices on the Tokyo market, brokers said.

Investor sentiment was also brightened by better-than-expected import and export numbers that came out of China in the middle of the morning, brokers said.

The market stayed on a firm note in the afternoon, but its upside grew somewhat heavy amid lingering concerns over slumping oil prices after U.S. crude hit a new 12-year low on Tuesday, they said.

“Several technical charts suggested at the end of last week that Japanese stocks were oversold. Purchases aimed at a technical rally gave a boost to the market,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

Large-cap automakers and technologies attracted buying as the yen’s weakening against the dollar rekindled hopes for better earnings among exporters, brokers said.

Still, “it cannot be said clearly that the recent fall (from the beginning of the year) has come to a halt completely,” Suzuki said.

Investors are keeping a close eye on unstable Chinese stock and crude oil price moves, brokers said.

Rising issues outnumbered falling ones 1,833 to 77 in the TSE’s first section, while 25 issues were unchanged.

Volume decreased to 2.14 billion shares from Tuesday’s 2.64 billion shares.

All 33 sector subindexes in the first section closed higher.

Automakers Toyota, Mazda and Honda were buoyant, along with electronics makers Sony, Panasonic and Hitachi.

Nintendo rocketed 6.47 percent thanks to brisk buybacks after the game maker’s rapid tumble in recent sessions, brokers said.

By contrast, retailer Aeon fell moderately. Other losers included mayonnaise manufacturer Kewpie, gyudon (beef-on-rice) restaurant operator Yoshinoya Holdings and publisher Kadokawa.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average climbed 610 points to end at 17,700.