Tokyo stocks extended gains in lethargic trading on Friday, supported by an overnight rise in U.S. equities and a weaker yen.
The 225-issue average rose 113.63 points, or 0.54 percent, to end at 21,199.57 on the Tokyo Stock Exchange, after surging 436.80 points on Thursday.
The Topix index of all issues on the TSE’s first section closed up 2.64 points, or 0.17 percent, at 1,537.10, after rising 27.65 points the previous day.
The Tokyo market started higher, pulled up by a drop in the yen against the dollar and an overnight rise on Wall Street, thanks to easing concerns over the turmoil in Hong Kong and over the U.S.-China trade talks, as well as a better than expected U.S. employment report for August released by Automatic Data Processing Inc., brokers said.
While the advance soon lost steam and trading became sluggish, the market’s downside remained firm for the rest of the day despite a lack of new trading incentives.
The market “failed to climb any further as investors adopted a wait-and-see approach” before the announcement later on Friday of the U.S. government’s employment statistics for August, Hiroaki Kuramochi, chief market analyst at Capital Partners Securities Co., said.
Hirohumi Yamamoto, strategist at Toyo Securities Co., noted that the Tokyo market was top-heavy as it had already reacted on Thursday to the news of Hong Kong’s complete withdrawal of a controversial extradition bill and of China’s plans to hold ministerial-level trade talks with the United States in October.
Brokers also said the Nikkei came under the pressure of selling on a rally after exceeding the 21,000 threshold the previous day.
Despite both indexes’ advance, falling issues slightly outnumbered rising ones 1,124 to 921 on the TSE’s first section and 106 issues were unchanged.
Volume decreased to 1.148 billion shares from Thursday’s 1.348 billion shares.
Export-oriented issues attracted buying, backed by a weaker yen and higher U.S. stocks. Among them, automakers Mazda and Subaru rose 2.64 percent and 0.84 percent, respectively, and construction machinery maker Komatsu finished up 2.08 percent.
Home builder Sekisui House advanced 4.81 percent, on the back of a better-than-expected operating profit for February-July.
Daikin jumped 3.65 percent, in response to a news report that the company will boost sales of air conditioners in Europe and consider increasing local production.
Other major winners included clothing store chain Fast Retailing and electronic parts maker TDK.
On the other hand, cybermall operator Rakuten tumbled 5.20 percent, due to news reports that the company is expected to delay the start of its full mobile services in Japan.
Also on the negative side were technology investor SoftBank Group and Takeda Pharmaceutical.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 130 points to end at 21,200.