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Tokyo stocks edge up in volatile trade after Wall Street rally

AFP-JIJI

Tokyo stocks rebounded slightly in a roller coaster session Wednesday after Wall Street finished the previous day with solid gains following a global rout.

The benchmark Nikkei stock average, which on Tuesday fell nearly 5 percent in its worst loss since the November 2016 election of Donald Trump as U.S. president, rose 0.16 percent or 35.13 points to close at 21,645.37.

The broader Topix index gained 0.37 percent or 6.50 points to reach 1,749.91.

The Nikkei average opened sharply higher, surging nearly 3.5 percent at one point as investors bought on dips following the recent slumps.

“If the New York Dow stops falling, foreign selling of Japanese stocks will likely cease,” said Masayuki Kubota, chief strategist at Rakuten Securities.

“Given that the Japanese economy and corporate earnings are good, it is highly likely that 21,078 will be the bottom of the latest crash,” he said in a note, referring to the Nikkei’s intraday low on Tuesday when the key stock average was down more than 7 percent.

But the early gains were gradually eroded.

“Investors are still nervous and uncertain if the market is now on course to recovery,” said Shinichi Yamamoto, broker at Okasan Securities in Tokyo.

“We need to keep an eye on the opening in New York later today,” Yamamoto said.

On Tuesday bargain-hunters swooped in to buy Wall Street stocks, stemming a hemorrhage that had been spreading panic among investors globally.

After Asian and European equity markets plunged on Tuesday stocks in New York started their trading day with another jaw-dropping fall, as the Dow index added to the previous day’s record loss by diving nearly 3 percent.

But within minutes a fierce battle appeared to be playing out between those betting on further declines and those who thought that the market correction had gone too far, leading to some wild price gyrations.

The blue-chip Dow Jones Industrial Average closed up 2.3 percent at 24,912.77.

The dollar was changing hands at ¥109.20 in Asia on Wednesday against ¥109.57 in New York.

In individual Tokyo stocks, Toyota Motor Corp. jumped 1.18 percent to ¥7,372 a day after the auto giant upgraded annual profit forecasts, as Honda Motor Co. gained 0.78 percent to reach ¥3,840.

Sony Corp. rallied 1.51 percent to ¥5,417 with Panasonic Corp. up 2.10 percent at ¥1,599.5.