Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rebound on Wall Street jump after dovish Fed meeting

JIJI

Stocks rebounded on the Tokyo Stock Exchange Thursday, with market sentiment brightened by an overnight surge on Wall Street following a surprisingly “dovish” outcome of the policy-setting meeting of the U.S. Federal Reserve.

The 225-issue Nikkei average rose 216.95 points, or 1.06 percent, to end at 20,773.49, after briefly gaining over 300 points in morning trading. On Wednesday, the key market gauge lost 108.10 points.

The Topix index of all first-section issues finished up 16.73 points, or 1.08 percent, at 1,567.49, after slumping 6.33 points the previous day.

A wide range of issues attracted purchases from the outset of Thursday’s trading, after the Dow Jones Industrial Average closed above 25,000 for the first time since Dec. 4 on Wednesday.

After the two-day Federal Open Market Committee meeting through Wednesday, the Fed signaled a possible end to its recent interest rate hikes and suggested a flexible approach to its balance sheet reduction, reassuring a U.S. market concerned over a global economic slowdown, brokers said.

Both Tokyo market indexes lost steam after the initial buying ran its course, hurt by profit-taking and selling on rallies, brokers said.

The FOMC outcome “couldn’t have been better” for U.S. equities, said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.

An official of another brokerage firm said of the Tokyo market, “I’ve got the impression that selling by individual investors abated thanks to the improved sentiment.” The official thus suggested that some investors remained cautious about making big moves in order to wait and see the results of U.S.-China ministerial-level trade talks ending later on Thursday.

“If progress is made at the U.S.-China trade talks, stocks will likely gain further ground next week,” Fujii said.

Rising issues outnumbered falling ones 1,563 to 493 in the TSE’s first section, while 72 issues were unchanged.

Volume decreased to 1.36 billion shares from 1.44 billion shares on Wednesday.

Mitsui O.S.K. Lines gained 4.51 after the shipping firm revised up on Thursday its consolidated earnings forecast for the year to March.

Astellas added 3.97 percent after the drug maker announced a share buyback plan on Thursday.

Other major winners included cosmetics maker Shiseido and technology giant Sony.

But Screen plunged 10.35 percent after the electronic parts maker revised down on Wednesday its earnings forecast for the year to March.

Also on the minus side were power supplier Tepco and clothing retailer Fast Retailing.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 140 points to end at 20,750.