Stocks rebounded on the Tokyo Stock Exchange on Thursday, mainly buoyed by an interest rate cut by the U.S. Federal Reserve.
The 225-issue Nikkei average advanced 83.74 points, or 0.38 percent, to end at 22,044.45. On Wednesday, the key market gauge fell 40.61 points.
The Topix index of all issues listed on the TSE first section closed up 9.04 points, or 0.56 percent, at 1,615.66, after dropping 7.96 points the previous day.
The Tokyo market spurted after the opening bell, with the Nikkei temporarily jumping some 300 points.
The climb was due to a sense of relief among investors as the Fed, in its two-day Federal Open Market Committee meeting through Wednesday, decided to lower interest rates by 0.25 percentage point, just as the market had expected, brokers said.
Market players were also relieved that Fed Chairman Jerome Powell confirmed, at a press conference held after the meeting, that the U.S. economy is solid and hinted that the Fed will consider additional rate cuts if the economy deteriorates, brokers said.
A weakening of the yen against the dollar continued to support the market until midmorning trading.
The growth of both stock indexes, however, was stunted in the afternoon against the backdrop of a stronger yen, with the dollar slipping below ¥108.
Still, the indexes remained in positive territory throughout the day.
The market failed to extend gains as “market players were disappointed” at the Bank of Japan’s decision to stop short of taking an additional monetary easing step, after both the U.S. and European central banks announced interest rate cuts, Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., said. The BOJ’s decision was made at its two-day policy board meeting that ended Thursday.
On the other hand, the underside of the market was supported by expectations for future additional easing, after the BOJ said that it will re-examine economic and price developments at the board’s next meeting, which will be held in late October.
Meanwhile, Yoshihiko Tabei, chief analyst at Naito Securities Co., said that investors in the late afternoon “sat on the sidelines to wait for BOJ Gov. Haruhiko Kuroda’s press conference” later in the day.
Rising issues outnumbered falling ones 1,752 to 337 in the first section, while 61 issues were unchanged.
Volume increased to 1.33 billion shares from Wednesday’s 1.22 billion.
Akebono Brake jumped 8.14 percent on the back of hopes for business reconstruction after the struggling auto parts maker said Wednesday that it will close six plants both inside Japan and overseas in a bid to rebuild its business.
Gakken Holdings rose 3.0 percent in response to the education company’s announcement that it will expand its shareholder benefit plan.
Also on the positive side were drug maker Chugai and power utility J-Power.
By contrast, semiconductor-related Sumco and mobile phone carrier NTT Docomo both dropped for the second consecutive session.
Also on the negative side were electronic parts maker Kyocera and trading house Toyota Tsusho.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average rose 70 points to end at 21,870.