Stocks snapped their three-session losing streak on the Tokyo Stock Exchange on Tuesday, driven higher by buybacks of undervalued issues after equities rose in Shanghai.
The Nikkei rose 92.8 points, or 0.55 percent, to end at 17,048.37. On Monday, it skidded 191.54 points to close below the 17,000 line for the first time in more than three months.
The Topix climbed 2.48 points, or 0.18 percent, to 1,390.41, after dropping 14.52 points the previous day.
After opening lower following weak European stocks overnight, the indexes popped up into positive territory thanks to buybacks of export-oriented issues on the back of the yen’s easing against the dollar.
The Nikkei average briefly rose some 130 points in midmorning trading, but erased the gains by the end of the morning session, dampened by lackluster Chinese economic data, including GDP for October to December, brokers said.
The gauges showed small ups and downs around the previous day’s closing levels for most of the afternoon session, caught in a tug of war between selling by risk-averse investors and buybacks of beaten-down stocks.
In late trading, the market drew some buying, with investor sentiment brightened by solid Shanghai equities, brokers said.
China’s GDP, retail sales and industrial production data were all weaker than market expectations and became a selling incentive in late morning trading. But the firmness in Shanghai stocks gave investors a sense of relief, brokers said.
“The impact of the Chinese economic data was limited on the market,” Hideyuki Ishiguro, senior strategist at Okasan Securities Co.’s Investment Strategy Department, said. “Hedge funds are rather worried about a further fall of the yuan.”
“Investor attention has already shifted to the FOMC meeting,” Ishiguro also said, referring to the U.S. Federal Reserve’s Federal Open Market Committee meeting for two days from Jan. 26. “Some position-adjustment selling ahead of the event was seen in trading,” he said.
Falling issues outnumbered rising ones 948 to 861 in the TSE’s first section, while 126 issues were unchanged.
Volume decreased to 2,173 million shares from Monday’s 2,230 million shares.
Game-maker Nintendo surged 9.07 percent after a foreign brokerage house revised up its investment rating on the firm.
The easier yen shored up automakers Toyota, Honda and Mazda, as well as technology giants Sony and Hitachi and camera maker Canon.
On the other hand, domestic demand-oriented names were battered by profit-taking, brokers said. Among them were Japan Tobacco, drug maker Takeda, retailer Seven & i Holdings and railway operator JR Tokai.
Banking groups Mitsubishi UFJ and Mizuho were downbeat, along with insurer MS&AD Holdings and nonbank lender Orient Corp.
In index futures trading on the Osaka Exchange, the March contract on the Nikkei average jumped 200 points to close at 17,060.