Tokyo stocks barely extended gains Thursday by resisting growing profit-taking pressure with help from a sharply weaker yen.
The Nikkei average of 225 selected issues on the first section of the Tokyo Stock Exchange rose 78.45 points, or 0.34 percent, to end at 23,479.15, after soaring 206.90 points Wednesday.
The TOPIX index of all TSE first-section issues was up 2.62 points, or 0.16 percent, at 1,674.48. It advanced 6.15 points the previous day.
The market opened sharply higher, after two of the three major U.S. stock price gauges —the Nasdaq composite index and the S&P 500 —rewrote their all-time closing highs Wednesday chiefly thanks to rises in technology issues, and after the dollar jumped close to 10-month highs above ¥111.
Investors’ risk appetite was stimulated by media reports about a slower increase in the number of people newly infected with the novel coronavirus in China, brokers said.
But after the Nikkei gained over 400 points in the early morning, selling to lock in profits gathered steam as the virus concerns persisted.
Sentiment was further dampened by the news that two passengers on the coronavirus-hit Diamond Princess cruise ship, now in Yokohama, died after leaving the ship for treatment, brokers said.
The market shed the bulk of its early gains as “the reports about the fresh coronavirus victims prompted futures-led selling,” Hiroaki Kuramochi, chief market analyst at Capital Partners Securities Co., said.
“Foreign investors would inevitably boost selling if the deadly virus outbreak spreads further (in Japan),” Kuramochi added.
Another market source pointed out that a fall in U.S. index futures in off-hours trading also weighed down the Tokyo market.
On the TSE’s first section, falling issues outnumbered rising ones 1,298 to 744 while 118 issues were unchanged. Volume increased to 1.17 billion shares from Wednesday’s 1.13 billion shares.
Automaker Toyota, technology and entertainment giant Sony and other export-oriented names attracted purchases thanks to the yen’s drop.
Oil issues such as JXTG and Cosmo Energy rose due to higher crude oil prices.
Financials including megabank group Mitsubishi UFJ and insurer Tokio Marine advanced as U.S. long-term interest rates went up.
Among other winners were technology investor Softbank Group and mobile phone carrier KDDI.
Meanwhile, selling hit railway operator JR East, furniture retailer Nitori and some other domestic demand-oriented stocks.
Also on the negative side were clothing store chain Fast Retailing and air conditioner maker Daikin.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average scaled 130 points to end at 23,500.