Tokyo stocks took a downturn Wednesday following an overnight fallback on Wall Street and strengthening of the yen.
The 225-issue Nikkei average gave up 106.63 points, or 0.49 percent, to end at 21,778.61. On Tuesday, the key market gauge rose 129.40 points.
The Topix index of all issues listed on the first section of the Tokyo Stock Exchange finished down 6.71 points, or 0.42 percent, at 1,596.29, after advancing 15.20 points the previous day.
The market opened sharply lower as investors rushed to sell after U.S. shares were battered by a substantial worsening of the Institute for Supply Management’s manufacturing index for September, announced Tuesday.
The yen’s appreciation against the dollar also dampened sentiment, brokers said.
But after the initial sell orders were executed, the market went sideways for the rest of the day’s session.
Stocks resisted falling further, as “a rise in index futures on the Dow Jones Industrial Average in off-hours trading raised expectations for a rebound” in the major U.S. stock index on Wednesday, Yutaka Miura, senior technical analyst at Mizuho Securities Co., said.
Miura also pointed out that the Tokyo market was “underpinned by what appeared to be the Bank of Japan’s purchases of exchange-traded funds.”
Meanwhile, Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., offered the view that the market turned inactive soon after the initial tumble because “investors have been reluctant to tilt their positions either way” ahead of the next round of U.S.-China trade talks, expected to be held in Washington on Oct. 10-11, and a planned U.S. tariff hike on Chinese goods worth $250 billion on Oct. 15.
Rising issues slightly outnumbered falling ones 1,057 to 1,007 on the first section, while 87 issues were unchanged.
Volume rose to 1.171 billion shares from Tuesday’s 1.165 billion shares.
Export-oriented issues suffered setbacks due to the higher yen, with automaker Mazda Motor Corp. sinking 3.51 percent and technology giant Sony Corp. 2.36 percent.
Semiconductor-related issues, such as Tokyo Electron and Shin-Etsu Chemical Co., met with selling stemming from a drop in the SOX Philadelphia semiconductor index.
Kewpie Corp. lost 4.29 percent after the mayonnaise-maker’s December 2018-August 2019 earnings failed to beat market consensuses.
Also on the negative side were oil resources developer Inpex Corp. and medical information services provider M3 Inc.
On the other hand, money scandal-hit Kansai Electric Power Co. jumped 3.22 percent on buybacks.
Among other major winners were soy sauce producer Kikkoman Corp. and electronic device-maker Casio Computer Co.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 260 points to end at 21,710.