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Nikkei surges on futures-led repurchases

JIJI

The Nikkei 225 average soared Tuesday, buoyed by futures-led buybacks.

The Tokyo Stock Exchange’s benchmark gauge jumped 291.60 points, or 1.30 percent, to end at 22,664.69. It rose 66.03 points Monday.

The Topix, which covers all issues on the TSE’s first section, closed 11.30 points, or 0.67 percent, higher at 1,698.91 after climbing 3.30 points Monday.

Mainstay issues attracted futures-led repurchases, with investors taking heart from the yen’s weakening against the dollar, brokers said.

The Nikkei’s surge was driven by “speculative buybacks” ahead of Friday’s special quotation fixing to settle September index futures and option contracts, an official of a midsize securities firm said.

The official also noted that the market advanced after meeting with excessive selling last week.

“Issues backed by strong corporate earnings attracted buying on dips” following the recent market slump, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

Ota also said an unsettled mood was spreading in the market due to uncertainty over trade issues involving the United States.

Rising issues outnumbered falling ones 1,058 to 942 in the first section, while 107 issues were unchanged.

Volume increased to 1.344 billion shares from 1.116 billion Monday.

Renesas Electronics closed 4.43 percent higher after the chipmaker announced Tuesday that it will acquire U.S. rival Integrated Device Technology Inc. for $6.7 billion.

Automakers Toyota, Honda and Nissan were upbeat due to the weaker yen.

Also on the plus side were mobile phone carrier SoftBank Group and clothing retailer Fast Retailing.

By contrast, Yahoo Japan ended 2.16 percent lower after U.S. investment firm Altaba Inc., formerly Yahoo Inc., said Monday it will sell all of its stake in the internet portal site operator.

Game maker Konami and insurer Tokio Marine were among other major losers.