Stocks bounced back steeply Friday thanks to aggressive buybacks of a wide range of beaten down issues that sent the key Nikkei average soaring more than 900 points.
The 225-issue Nikkei closed at 16,958.53, up 941.27 points, or 5.88 percent, from Thursday, posting its biggest single-day gain since Sept. 9, when it skyrocketed 1,343.43 points.
On Thursday, the key market gauge tumbled 398.93 points to its worst closing since Oct. 30.
The Topix index of all first-section issues jumped 72.70 points, or 5.59 percent, to end at 1,374.19, after falling 37.48 points the previous day.
Both indexes advanced for the first time in three days.
Buybacks mounted as U.S. and European stocks jumped Thursday on a hint from European Central Bank President Mario Draghi that additional easing might emerge at its monetary policy meeting in March.
His remarks after the ECB’s policy meeting Thursday triggered hopes the Bank of Japan might do the same at its two-day policy-setting meeting next Thursday, brokers said.
The Tokyo market was also supported by the yen’s weakening, which sparked buying of automakers and electronics makers.
The Nikkei average was sharply higher from the outset of Friday’s trading and accelerated its gains in the afternoon to over 900 points as investors stepped up buybacks of large-cap mainstay issues amid a spreading sense of relief at the absence of large-lot profit-taking by investors from oil-producing countries, brokers said.
Investors also took heart from a rosy performance of Shanghai stocks, they said.
Japanese stocks have been oversold in light of technical charts, said Hideyuki Suzuki, head of SBI Securities Co.’s investment market research department.
Thanks to Friday’s surge, expectations for a bottoming out have begun to emerge, Suzuki said.
Meanwhile, an official at a Japanese fund manager noted it is premature to say stocks have hit bottom as concerns linger over the courses of the crude oil market and the Chinese economy.
On the TSE’s first section, 1,920 issues ended higher while only eight lost ground. Seven were unchanged.
Volume decreased to 2.6 billion shares from Thursday’s 3.1 billion.
All 33 sector subindexes on the first section finished higher.
Realtors were buoyant on hopes for the BOJ’s additional easing. Among them were Sumitomo Realty, Mitsui Fudosan and Mitsubishi Estate.
Beaten-down resources-related names attracted buybacks, including trading houses Mitsubishi and Mitsui, and oil companies Inpex and Japan Petroleum Exploration.
The eight losers included drug store operator Kirindo Holdings, Nippon BS Broadcasting and lens maker Tamron.
In index futures trading on the Osaka exchange, the key March contract on the Nikkei average soared 870 points to 16,870.