Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rebound on brisk U.S. equities, weaker yen

JIJI

Stocks turned higher on the Tokyo Stock Exchange Wednesday, backed by an overnight rise in U.S. equities and the yen’s weakening against the dollar.

The 225-issue Nikkei average climbed 143.99 points, or 0.74 percent, to close at 19,506.54. On Tuesday, the key market gauge retreated 87.35 points.

The Topix index of all first-section issues finished up 9.89 points, or 0.62 percent, at 1,607.65, after losing 2.36 points the previous day.

Stocks stayed in positive territory throughout Wednesday, staging a recovery from the previous day’s setback caused by a risk-averse mood after North Korea’s launch of a ballistic missile over Japan into the Pacific Ocean.

Investors took heart from Tuesday’s rebound in U.S. stock prices thanks to better-than-expected results of the Conference Board’s U.S. consumer confidence index for August, released the same day, brokers said.

The Tokyo stock market was also supported by the dollar’s strengthening on the back of the U.S. data’s positive readings, brokers said.

Although the impact of the missile firing seems to have diminished, “it cannot be said that the market is completely free from (concern over) North Korea,” an official of a bank-affiliated securities company said.

Mitsuo Shimizu, equity strategist at Japan Asia Securities Co., took a similar view, saying that traders will likely be on guard against additional provocations “until North Korea’s national foundation day on Sept. 9” or maybe even longer.

Given the market’s current “lack of autonomy,” any external factor can easily affect Tokyo stock prices, he noted, adding that the market may remain susceptible for some time to the situation surrounding North Korea.

In view of such market condition, “the Tokyo market may react if Wall Street rises on U.S. jobs data for August” to be released later on Wednesday by Automatic Data Processing Inc., Shimizu also said.

Rising issues outnumbered falling ones 1,357 to 540 in the TSE’s first section, while 126 issues were unchanged.

Volume rose to 1.71 billion shares from Monday’s 1.39 billion shares.

Domestic demand-linked defensive issues, including fisheries product maker Nippon Suisan Kaisha, beverage maker Yakult and NH Foods attracted buying amid remaining worries about geopolitical tensions over North Korea.

Mainstay issues, including Sony, Toyota, SoftBank Group and Fast Retailing were also upbeat on bargain hunting.

By contrast, oil companies, including JXTG Holdings and Cosmo Energy Holdings, met with selling due to lower crude oil prices.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 140 points to end at 19,520.

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