Stocks wiped out early losses to close higher Monday, assisted by a jump in Chinese equities.
The Nikkei 225 average rebounded 82.74 points, or 0.37 percent, to end at 22,614.82. On Friday, the key market gauge lost 126.08 points.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 2.46 points, or 0.15 percent, higher at 1,695.31 after dropping 11.79 points Friday.
After opening lower, both indexes stayed in negative territory throughout the morning as investors refrained from active buying ahead of earnings releases from major companies later this week, brokers said.
In the afternoon, however, the closely watched key market gauges popped into the positive side, supported by small-lot buying after a surge of over 4 percent in the key Shanghai stock index, brokers said.
Some food and cosmetics issues got a boost from strong Chinese stocks following Beijing’s reported income tax deduction plan for individuals, an official of a major securities firm said.
“Investors took a wait-and-see stance ahead of the earnings season and trading is likely to continue thin tomorrow,” the official said.
Yutaka Miura, senior technical analyst at Mizuho Securities Co., said he expects brisk corporate earnings reports for April-September and cautious full-year business forecasts.
The earnings reports will likely support the market’s downside but not drive stocks sharply higher, Miura said.
Rising issues outnumbered falling ones 1,216 to 792 in the TSE’s first section, while 100 issues were unchanged.
Volume decreased to 1.135 billion shares from 1.281 billion Friday.
Major gainers in the cosmetics sector included Shiseido, Kose and Pola Orbis.
Defense-related Howa Machinery and Ishikawa Seisakusho jumped on growing geopolitical concerns after U.S. President Donald Trump said Saturday he intends to withdraw his country from the Intermediate-Range Nuclear Forces Treaty with Russia. Howa Machinery surged 5.32 percent and Ishikawa Seisakusho 11.92 percent.
Among other major winners were mega-bank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, and clothing retailer Fast Retailing.
By contrast, Kawasaki Heavy briefly hit a year-to-date low of ¥2,803 and closed 9.28 percent lower after the company Friday lowered its consolidated earnings forecast for the year to March.
Also weaker were mobile phone carrier SoftBank Group and game maker Nintendo.