Stocks rebounded on the Tokyo Stock Exchange on Thursday, thanks chiefly to hefty buying of semiconductor-related issues.
The 225-issue Nikkei average gained 104.29 points, or 0.47 percent, to end at 22,319.61, its highest finish since Feb. 27. On Wednesday it dropped 62.80 points.
The Topix index of all first-section issues closed up 4.40 points, or 0.25 percent, at 1,772.13. The index fell 2.02 points the previous day.
The Nikkei average gained over 160 points in the morning session, backed by robust performances of chip-related issues, particularly Tokyo Electron, which announced strong earnings results and rosy forecasts on Wednesday, brokers said.
The maker of chip-making gear is a heavyweight component of the key price index.
Despite sporadic selling on a rally in the afternoon, the market maintained strength throughout Thursday’s trading, and was supported by the dollar’s firmness against the yen on the back of gains in long-term U.S. interest rates, brokers said.
“Given the yen’s weakness, players reallocated funds from domestic demand-focused issues to big export-oriented names,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.
Tabei added that investors bought stocks anticipating no major impact from Friday’s inter-Korean summit on the dollar-yen trend.
“Foreigners who had been sellers for a long time” shifted to the buy side to contribute to the upturn on Thursday, said Hiroaki Hiwada, strategist at Toyo Securities Co.
But he expressed concern over the multiple scandals continuing to hit the administration of Prime Minister Shinzo Abe and overshadowing the market, saying, “The domestic political conditions remain unfavorable.”
Rising issues outnumbered falling ones 1,243 to 765 in the TSE’s first section, while 75 issues were unchanged.
Volume rose to 1.520 billion shares, from Wednesday’s 1.423 billion shares.
Tokyo Electron jumped 8.42 percent. Its peers Disco, Screen, Sumco, Advantest and Shin-Etsu Chemical were also buoyant.
Kao attracted purchases thanks to Mitsubishi UFJ Morgan Stanley’s upward revision in its target price for the consumer goods giant.
Clothing retailer Fast Retailing and drugmaker Otsuka Holdings also went up.
By contrast, medical information provider M3 met with selling as its operating profit forecast for the year through March 2019 failed to beat market consensus.
Other major losers included messaging app provider Line and industrial robot producer Fanuc.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average rose 100 points to close at 22,320.