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Buybacks help push Tokyo stocks up

JIJI

Stocks wiped out earlier losses to close higher on the Tokyo Stock Exchange on Tuesday, supported by buybacks on the back of a pause in the yen’s rise.

The 225-issue Nikkei average gained 58.75 points, or 0.37 percent, to finish at 16,085.51. On Friday, the key market gauge lost 161.65 points.

The Topix index of all first-section issues finished up 2.98 points, or 0.23 percent, at 1,300.83, after falling 13.42 points the previous day.

In the morning session, the Tokyo market moved mostly lower after U.S. equities lost ground Monday.

Weaker-than-expected Japanese economic indicators, including household spending in January, released just before the opening bell, also weighed down the market, brokers said.

While showing some resilience, stocks accelerated their downswing in the middle of the morning session after the Chinese manufacturing industry Purchasing Managers’ Index for February turned out to be sluggish.

Pushed down further by the yen’s strengthening against the dollar, the Nikkei average briefly lost nearly 170 points late in the morning session.

Stocks wiped out the losses early in the afternoon session thanks to buybacks prompted by a pause in the yen’s ascent. But their topside was limited amid a wait-and-see mood ahead of the release of key economic indicators later this week, with key market gauges briefly falling back into negative territory in late trading.

“The market’s downside was additionally supported by relatively solid moves of crude oil futures prices,” with the key West Texas Intermediate crude oil futures contract trading above $30 per barrel in recent days, said Yoshihiko Tabei, chief analyst at Naito Securities Co.

An official of a major securities firm said, “Any fresh buying incentive is needed for the Tokyo market to rise further,” adding that possible market-moving factors include brisk U.S. economic reports.

Still, investors were cautious about coming U.S. economic indicators, including the U.S. Institute for Supply Management’s manufacturing index for February, which was due out later Tuesday, after the recent batch of mixed economic data, Tabei said.

Rising issues outnumbered falling ones 980 to 838 in the TSE’s first section, while 124 issues were unchanged.

Volume fell to 2.2 billion shares from Monday’s 2.4 billion.

Nitto Denko surged a day after the electronic parts supplier announced a plan to buy back its own shares.

Domestic demand-oriented names, such as railway operator JR East and department store chain operator Isetan Mitsukoshi were also buoyant.

Other major winners included electronics maker Panasonic, automaker Honda, Japan Tobacco, and drug makers Ono Pharmaceutical and Shionogi.

By contrast, automaker Toyota, heavy machinery producer Mitsubishi Heavy, insurer Dai-ichi Life and mega-bank Mitsubishi UFJ met with selling.

Clothing store chain operator Fast Retailing and industrial robot producer Fanuc, both heavily weighted components of the Nikkei average, were also downbeat.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average closed up 170 points at 16,100.