Stocks bounced back on the Tokyo Stock Exchange on Friday, supported by buybacks and a rise in Dow Jones industrial average futures in off-hours trading.
The 225-issue Nikkei average rose 84.89 points, or 0.40 percent, to end at 21,116.89. On Thursday, the key market gauge dropped 97.72 points.
The Topix index of all first-section issues closed up 5.21 points, or 0.34 percent, at 1,546.71, after losing 12.72 points the previous day.
Both indices lost ground just after the opening bell, dragged down by news about attacks on two tankers, including one operated by a Japanese company, near the Strait of Hormuz on Thursday, brokers said. The strait is a strategic waterway through which large amounts of oil and gas are transported.
They soon rebounded into positive territory, buoyed by buybacks and a climb in Dow futures, brokers said.
In the afternoon, trading was lethargic amid a dearth of fresh trading incentives, but the market managed to stay on the sunny side for the rest of the day.
Hiroaki Hiwada, strategist at Toyo Securities Co., said that the morning’s rebound was also due to “a sense of relief spreading among investors that the effects of the tanker attacks on the financial market were limited, as the incident had only a small impact on other Asian markets.”
Regarding the Tokyo market’s firmness in slow afternoon trading, Ryuta Otsuka, strategist at the investment information department of Toyo Securities, said that “investors did not have a reason to sell” before the release of China’s industrial production and retail sales data for May, as well as fixed asset investment in January to May, during off-hours trading.
Rising issues outnumbered falling ones 1,303 to 737 in the TSE’s first section, while 102 issues were unchanged.
Volume fell to 1.07 billion shares from 1.17 billion shares on Thursday.
Beauty Garage shot up 16.13 percent after the trading company, which specializes in products for hair salons and other businesses in the beauty industry, announced a rosy operating profit forecast for the year ending in April 2020 and a plan to buy back its own shares.
Oil names, including JXTG and Inpex, were higher thanks to a rise in key New York crude oil futures on Thursday in the wake of the attacks near the Strait of Hormuz.
Other major winners included technology giant Sony and Pan Pacific International Holdings, which runs discount store Don Quijote.
On the other hand, semiconductor-related Tokyo Electron dropped 1.88 percent, hurt by a drop in the stock of major U.S. chipmaker Broadcom, which cut its sales outlook for the year ending in October 2019.
Among other major losers were shipping firm Nippon Yusen and renewable energy developer Renova.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average gained 90 points to end at 21,030.
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