Stocks rallied sharply on Thursday thanks to vigorous purchases of issues battered by a recent slump, driving the benchmark Nikkei average to snap its six-session losing streak.
The 225-issue Nikkei average jumped 387.82 points, or 1.68 percent, to end at 23,486.11 on the Tokyo Stock Exchange. On Wednesday, the key market gauge lost 193.68 points.
The Topix index of all first-section issues climbed 33.73 points, or 1.84 percent, to close at 1,870.44 after falling 21.42 points the previous day.
The market saw active moves to buy dips from the outset of Thursday’s trading.
Investors took heart from the yen’s weakening against the dollar after a better than expected reading in Automatic Data Processing Inc.’s U.S. employment data for January, brokers said, adding that Wall Street’s rebound also helped lift sentiment.
The Tokyo market maintained strength in the afternoon, supported by gains in financials stemming from robust earnings announced by mega-bank groups Wednesday, market sources said.
“Nonresidents, as well as domestic investors, were seen hunting not only major banking groups but also regional banks,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Players “activated buying on dips after the Nikkei average fell close to 23,000” the previous day, said Hiroaki Hiwada, strategist at Toyo Securities Co.
Thursday’s market mirrored strong results at Japanese firms, Yoshihiko Tabei, chief analyst at Naito Securities Co., noted.
But he offered a bleak view on the course of the market, pointing out that buying sentiment is not strong enough to push the Nikkei up to retake 24,000 at a time when U.S. stocks are expected to undergo another correction from the recent upsurge.
Rising issues far outnumbered falling ones 1,789 to 238 in the TSE’s first section, while 35 issues were unchanged.
Volume edged down to 1.816 billion shares, from 1.820 billion shares Wednesday.
Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and other mega-banks attracted purchases.
Fujifilm Holdings Corp. shot up 12.12 percent as investors welcomed its announcement Wednesday that it will acquire U.S. printer and copier maker Xerox Corp.
Other major winners included construction machinery maker Komatsu Ltd., mobile phone carrier KDDI Corp. and online fashion mall operator Start Today Co.
By contrast, electronics maker Fujitsu Ltd. plunged 12.84 percent due to a plunge in operating profit in April-December.In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average jumped 350 points to close at 23,440.