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Tokyo stocks edge up after key events

JIJI

Stocks wiped out earlier losses to finish slightly firmer on the Tokyo Stock Exchange Thursday after closely watched events including the U.S. Federal Reserve’s policy-setting meeting.

The 225-issue Nikkei average rose 12.76 points, or 0.07 percent, to close at 19,590.14. On Wednesday, the key market gauge lost 32.12 points.

The Topix index of all first-section issues ended up 1.38 points, or 0.09 percent, at 1,572.69, after shedding 3.59 points the previous day.

The yen’s rise against the dollar pushed down Tokyo stocks early in the morning session.

The Fed decided to raise its benchmark interest rate target at its Federal Open Market Committee meeting held for two days through Wednesday. But the yen gained ground as the Fed maintained its projection of two additional rate hikes this year, contrary to speculation among some market players over a faster pace of hikes, brokers said.

Led by losses in export-oriented names, the Nikkei average briefly lost more than 120 points, but strong investor appetite for buying on dips helped limit the market’s downside, according to brokers.

The key market gauges popped up into positive territory in the afternoon after the Bank of Japan, as expected, decided to keep its monetary policy intact at its two-day Policy Board meeting through Thursday and the Netherlands’ far-right Party of Freedom, or PVV, was reported to have failed to defeat Prime Minister Mark Rutte’s ruling party in Wednesday’s general election.

The market was also lifted by expectations for exchange-traded purchases by the BOJ, said Masashi Itoga of Mito Securities Co.’s Investment Information Department.

The rebound in stock prices despite the yen’s ascent shows that market sentiment was “strong,” an official of a major securities firm said.

An official of an online securities firm said the earlier market weakness offered a good buying opportunity for investors.

Still, the market’s topside was limited ahead of a Group of 20 financial meeting in Germany scheduled for this weekend, Itoga said. “Institutional investors were also unable to step up purchases, with the approach of the fiscal year-end this month,” he added.

“The Nikkei average’s topside could be capped around 19,500 to 19,600 for the time being” unless the yen weakens against the dollar, Itoga said.

Rising issues outnumbered falling ones 1,235 to 630 in the TSE’s first section, while 139 issues were unchanged.

Volume grew to 1.80 billion shares from Wednesday’s 1.65 billion shares.

Oil companies JX Holdings, Inpex and Japex were buoyant after the key crude oil futures contract rebounded for the first time in eight sessions in New York overnight.

Machinery-makers Komatsu, Hitachi Construction and Kubota as well as steel producers JFE Holdings and Nippon Steel & Sumitomo Metal were also on the plus side, after their U.S. peers attracted buying in New York on Wednesday.

By contrast, automaker Nissan turned lower on a news report that French consumer affairs authorities have told prosecutors that Carlos Ghosn, who serves as chief executive officer both at Nissan and French partner Renault, should be held responsible for Renault’s emissions scandal.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average was down 10 points at 19,440.