Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks end higher after directionless trading

JIJI

Tokyo stocks closed higher on Tuesday due to late purchases prompted by a rebound in Chinese stocks, after directionless trading for the majority of the day amid a lack of trading incentives.

The 225-issue Nikkei average gained 188.17 points, or 0.81 percent, to end at 23,520.01 on the Tokyo Stock Exchange, after losing 60.03 points on Monday.

The Topix index of all issues listed on the TSE first section climbed 5.64 points, or 0.33 percent, to 1,709.67, extending its winning streak to a sixth trading day. It rose 1.26 points the previous day.

Both the Nikkei and the Topix had started almost flat in the absence of fresh trading incentives.

While the Topix remained below Monday’s closing level in the morning, the Nikkei moved narrowly at slightly higher levels, helped by rises in some of its heavily weighted components including clothing store chain Fast Retailing and convenience store chain FamilyMart, brokers noted.

The Nikkei was also buoyed by a slight weakening in the yen.

Both indexes gained ground in the late afternoon, with the Topix turning to the positive side, supported by buybacks and firm Chinese stocks as well as a surge in drug manufacturer Otsuka Holdings, brokers said.

“The underside of the Nikkei was supported by lingering optimism about the U.S.-China trade talks,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.

Despite U.S. President Donald Trump’s statement last week that he had not agreed to tariff rollbacks before the signing of a “phase one” trade deal, investors still held expectations for such tariff measures since Trump has not denied that his country will sign the deal, Ichikawa noted.

On the lackluster trading for the majority of the day, Yutaka Miura, senior technical analyst at Mizuho Securities Co., said that market participants were “sitting on the sidelines as there were no trading incentives to trigger active selling, nor were there incentives that instigate buying.”

In the first section, rising issues outnumbered falling ones 1,270 to 787, while 96 issues were unchanged. Volume increased slightly to 1.26 billion shares from Monday’s 1.24 billion shares.

Otsuka Holdings jumped 5.83 percent, after posting better-than-expected operating profit and net profit for the January-September period and announcing that the firm would continue a clinical development program for an Alzheimer’s treatment.

General contractor Kajima rose 5.23 percent, as its operating profit for April-September exceeded the market consensus.

Also on the positive side were game maker Bandai Namco and job information provider Recruit Holdings.

On the other hand, Mitsui Mining & Smelting tumbled 13.20 percent after the company revised down its forecast operating profit for the business year until March 2020.

Among other major losers were technology investor SoftBank Group and daily goods maker Kao.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average shot up 250 points to end at 23,550.