Tokyo stocks advanced further on the Tokyo Stock Exchange Monday, supported by the yen’s drop and gains in overseas equities late last week following the Bank of Japan’s decision to introduce a negative interest rate policy.
The 225-issue Nikkei average rose 346.93 points, or 1.98 percent, to finish at 17,865.23. On Friday, the key market gauge jumped 476.85 points.
The Topix index of all first-section issues closed up 30.60 points, or 2.14 percent, at 1,462.67, after climbing 39.97 points the previous trading day.
Stocks attracted buying from the outset of Monday’s trading after European and U.S. equities gained ground on Friday on the back of the BOJ’s monetary policy decision.
The yen’s sharp drop against the dollar also helped lift the Tokyo stock market, pushing up export-oriented issues, including automakers and electronics manufacturers, brokers said.
The market accelerated its upswing toward the close, with the Nikkei average briefly rising above 17,900 in the late afternoon.
“Along with the BOJ’s monetary easing, brisk earnings from major Japanese companies prompted buying,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
While banks met with selling due to worries about deterioration in earnings due to the introduction of a negative interest rate on some of their current account deposits held at the BOJ, the steel, information and communications, realtor and electronics manufacturing sectors scored sharp gains.
The market reacted little to sluggish Chinese economic data released in the middle of the morning session. The Chinese manufacturing industry purchasing managers’ index for January released by the government turned out to be weaker than market expectations, but an improved Caixin China manufacturing PMI for the same month, which was based on a private-sector survey, offset the concern raised by the government data, according to brokers.
“The Tokyo market is gradually getting back on a recovery trend,” Ota said.
An official of a major securities firm said the market is expected to test its upside this week, pushed up by increasing buybacks of oversold stocks.
Rising issues overwhelmed falling ones 1,617 to 286 in the TSE’s first section, while 31 issues were unchanged.
Volume dwindled to 3.50 billion shares from Friday’s 4.13 billion shares.
Among export-oriented issues, automakers Toyota and Mazda, electronics parts-maker Nidec, camera producer Canon and air conditioner-maker Daikin drew hefty purchases.
Printer-maker Seiko Epson, electronics parts producer Murata Manufacturing, electronics giant Sony and cosmetics-maker Shiseido surged after issuing brisk earnings reports.
Nippon Steel & Sumitomo Metal rose sharply after announcing plans to repurchase own shares and to acquire Nisshin Steel.
By contrast, mega-banks Sumitomo Mitsui, Mitsubishi UFJ and Mizuho were downbeat.
Japan Post Bank and Japan Post Insurance also met with heavy selling on worries about deteriorated earnings due to lower investment returns.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average advanced 230 points to end at 17,870.