Tokyo stocks rebounded Monday after five straight losing sessions, five-session sell-off, buoyed by Bank of Japan Gov. Haruhiko Kuroda’s surprising statement vowing to maintain market stability through ample liquidity injections amid the coronavirus crisis.
The Nikkei 225 average jumped 201.12 points, or 0.95 percent, to end at 21,344.08 after giving up 2,336.19 points in the past five trading days.
The Topix, which covers all issues on the Tokyo Stock Exchange’s first section, closed 15.00 points, or 0.99 percent, higher at 1,525.87.
Stocks nose-dived in the early morning in the wake of another steep fall Friday on Wall Street, in which the Dow Jones Industrial Average surrendered over 1,000 points to fall below 25,000 at one point.
U.S. Federal Reserve Chairman Jerome Powell’s urgently issued statement helped the Dow pare its losses to some extent as rate cut expectations grew. But the favorable effects did not last long, brokers said.
Tokyo stocks started rebounding after Kuroda said in his statement Monday that the central bank “will provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”
Sentiment was also brightened by the BOJ’s extraordinary injection of ¥500 billion into the banking system and rises in Chinese stocks, brokers said.
Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said market participants “hailed the BOJ for not only making verbal promise but taking action.”
In the afternoon, however, the market lost steam amid persistent fears over the China-born virus, which now has caused deaths in the United States and spread to New Zealand, Nigeria and other countries.
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., noted that sentiment remained dampened as the virus outbreak began to turn social and economic activities stagnant, pointing to the government’s requests that all schools be closed down and for crowd-drawing events to be canceled or at least postponed.
On the TSE’s first section, rising issues outnumbered falling ones 1,892 to 240, while 29 issues were unchanged. Volume fell to 2.035 billion shares from 2.420 billion Friday.
Restaurant operators and realtors, including Skylark and Mitsubishi Estate, attracted buybacks.
Game maker Gumi surged 16.81 percent after it raised its its operating profit estimate for last May to January.
Other major winners were chipmaking equipment manufacturer Tokyo Electron and drugstore chain operator Sugi Holdings.
On the other hand, losers included insurer Dai-ichi Life and technology firm Kyocera.