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Tokyo stocks rebound on yen’s plunge

JIJI

Stocks staged a strong rally Tuesday, supported by a sharp drop of the yen against the dollar.

The Nikkei 225 average gained 190.08 points, or 0.86 percent, to end at 22,278.12, its highest finish since Feb. 27. On Monday, it dropped 74.20 points.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 18.96 points, or 1.08 percent, higher at 1,769.75. The index inched down 0.34 point Monday.

The market opened firmer following the dollar’s surge above ¥108.50 overnight on the back of a rise in U.S. long-term interest rates.

Although profit-taking pressure built up in early morning trading, stocks regained their upward momentum later, with financial and export-oriented issues, in particular, attracting hefty purchases, brokers said.

Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said Tuesday’s upturn was led by “buybacks apparently by nonresidents.”

Foreigners hunted banks and other laggards in the previous week’s rally, an official at a bank-affiliated securities firm pointed out.

Brokers said the market’s advance slowed in the afternoon as some investors retreated to the sidelines to wait for major Japanese companies’ earnings reports to be released starting later this week.

Akira Tanoue, senior investment strategist at Nomura Securities Co., noted that “domestic political risks” have overshadowed the market since latest media polls showed sharp approval rating drops for the Cabinet of Prime Minister Shinzo Abe amid a spate of scandals.

Rising issues far outnumbered falling ones 1,603 to 415 in the first section, while 64 issues were unchanged.

Volume rose to 1.469 billion shares, from Monday’s 1.343 billion.

The weaker yen pushed up automakers across the board, including Toyota, Honda, Subaru, Nissan and Mazda.

All mega-bank groups, such as Mitsubishi UFJ, Mizuho and Sumitomo Mitsui, were buoyant thanks to the U.S. interest rate rise, and so were Tokio Marine, Dai-ichi Life and other insurers.

Higher crude oil prices led to purchases of oils JXTG, Idemitsu, Showa Shell and Cosmo Energy.

Major winners also included retailer FamilyMart Uny Holdings and realtors Sumitomo Realty and Mitsubishi Estate.

By contrast, cosmetics maker Kao and semiconductor-linked Advantest met with selective selling.