Stocks rebounded on the Tokyo Stock Exchange on Thursday as investor sentiment was brightened by robust corporate earnings reports and the Bank of Japan’s decision to keep interest rates low.
The 225-issue Nikkei average gained 107.58 points, or 0.48 percent, to 22,307.58, its highest finish since Dec. 3. Wednesday, the key market gauge dropped 59.74 points.
The Topix index of all first-section issues closed up 8.23 points, or 0.51 percent, at 1,620.28, after falling 10.92 points the previous day.
Buying of companies with strong earnings supported the market, brokers said.
The central bank’s decision to keep both short- and long-term interest rates extremely low until at least around spring 2020 also served as a tailwind for Japanese shares, they said.
The BOJ’s decision “prompted short covering,” said Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities Ltd.
The decision pushed up domestic demand-oriented names, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.
But he said that the BOJ’s move “wasn’t so surprising and its effect is unlikely to last long.”
Brokers said that a wait-and-see mood remained strong ahead of Japan’s 10-day holiday from Saturday.
“Foreign investors apparently had no interest” in trading in Tokyo, an official of a bank-linked securities firm said, indicating that individual players led Thursday’s advance.
Rising issues far outnumbered falling ones 1,578 to 489 in the TSE’s first section, while 73 issues were unchanged.
Volume inched up to 1.221 billion shares from Wednesday’s 1.213 billion shares.
Hitachi Chemical Co. shot up 9.77 percent on news reports that parent Hitachi is considering selling the core unit.
Kao Corp. climbed 5.25 percent the day after the daily goods manufacturer announced plans to buy back up to 7 million of its shares.
Also on the plus side were chipmaking gear manufacturer Tokyo Electron and technology investor Softbank Group Corp.
By contrast, Nissan Motor Co. sagged 1.77 percent the day after downgrading its operating profit forecast for the year ended last March.
Food producer Kikkoman Corp., pharmaceutical firm Astellas Pharma Inc. and clothing store chain Fast Retailing Co. were among other major losers.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average went up 180 points to end at 22,350.