Stocks snapped a four-session losing streak Monday on the Tokyo Stock Exchange, helped by buybacks of undervalued shares and weakness in the yen.
The 225-issue Nikkei average climbed 184.71 points, or 1.10 percent, to end at 17,004.30. On Friday, the key market gauge slumped 225.40 points.
The Topix index of all first-section issues grew 11.44 points, or 0.84 percent, to close at 1,380.41, after falling 19.84 points the previous trading day.
Tokyo kicked off the week with hefty losses after the U.S. Dow Jones industrial average fell sharply Friday on rekindled concerns of an additional interest rate hike by the U.S. Federal Reserve.
Investor sentiment was also hurt by heightened geopolitical risks after North Korea launched a satellite widely viewed as a ballistic missile test Sunday morning, brokers said.
After initial selling ran its course, the Nikkei average cut its losses and entered positive territory on buybacks of beaten-down shares helped by the yen’s easing against the dollar, they said. But the key gauge closed the morning session slightly lower.
In the afternoon, the Nikkei average turned higher again as investors stepped up purchases, underpinned by further yen weakness, to bring it above the psychologically important 17,000 line, with the dollar temporarily rising above ¥117.40, they said.
Following a dive of over 1,000 points in the four sessions through Friday, investors also took heart from a rise in U.S. stock index futures on the Globex 24-hour trading system, the brokers said.
Still, “wariness over the course of fiscal 2016 earnings at major export-oriented companies overshadowed the market,” said Hideyuki Ishiguro, senior strategist at Okasan Securities Co.’s Investment Strategy Department.
The dollar stayed largely above ¥117 in Tokyo until the stock market closed, but remained lower than the average exchange rate of ¥119.40 assumed for fiscal 2015 by large manufacturers in the Bank of Japan’s “tankan” quarterly business sentiment survey for December.
“The dollar needs to retake ¥120,” Ishiguro said. “The Nikkei is expected show ups and downs of about 500 points from 17,000 for the rest of this week.”
Rising issues outnumbered falling ones 1,464 to 407 in the TSE’s first section, while 65 issues were unchanged.
Volume sank to 2.738 billion shares from Friday’s 3.389 billion shares.
Mobile game site operator DeNA jumped 9.81 percent after its full-year forecast for group operating profit turned out nearly the same as market expectations, brokers said.
Other domestic demand-oriented issues buoyed by the rebound were mobile carrier SoftBank, realtors Mitsui Fudosan and Mitsubishi Estate and general contractor Kajima.
Nonferrous metals producer Dowa Holdings plummeted 18.54 percent after the company cut its full-year earnings projection on Friday, brokers said. Rivals Sumitomo Metal Mining and Mitsubishi Materials were also downbeat.
In the financial sector, mega-bank Sumitomo Mitsui, brokerage Nomura and insurer Tokio Marine Holdings were sluggish.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average shot up 280 points to end at 17,000.