Tokyo stocks staged a moderate rebound Tuesday, buoyed by growing hopes for powerful U.S. economic measures to alleviate the impact of the spreading coronavirus outbreak.
The Nikkei 225 average rose 168.36 points, or 0.85 percent, to end at 19,867.12 after plummeting 1,050.99 points Monday.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 17.71 points, or 1.28 percent, higher at 1,406.68. It tumbled 82.49 points Monday.
Stocks nose-dived in the early morning, after the U.S. Dow Jones Industrial Average registered its biggest point drop ever on the New York Stock Exchange Monday amid swelling fears over the spread of the novel coronavirus in the United States and other parts of the world, brokers said. The Nikkei lost over 800 points to sink below 19,000 for the first time since Dec. 26, 2018, on an intraday basis.
But after the sell-off, the market took an upturn as media reports about U.S. President Donald Trump’s intention of taking drastic economic measures, including a payroll tax cut, helped brighten sentiment, brokers noted.
Both the Nikkei and Topix returned to positive territory in the afternoon, also supported by a rally in U.S. index futures in off-hours trading and the yen’s sharp drop against the dollar.
“Especially the tax cut story prompted buybacks,” said Hirohumi Yamamoto, strategist at Toyo Securities Co. “But at the same time, some market participants turned buyers in anticipation of the proposed U.S. action prompting the Japanese government to hammer out some fiscal measures.”
Meanwhile, a domestic securities firm official offered the view that the market merely showed an “autonomous” rebound following the recent free falls, while downplaying Trump’s move. “Economic measures cannot prevent the virus from spreading,” the official noted.
“The market will remain volatile until an end to the global coronavirus outbreak comes into sight,” a domestic bank official pointed out.
On the first section, rising issues outnumbered falling ones 1,645 to 477 while 42 issues were unchanged. Volume increased to 2.570 billion shares from 2.518 billion Monday.
Brokerages were sharply higher, with Nomura jumping 7.16 percent and Daiwa 2.21 percent.
Export-oriented issues, including automaker Toyota and chipmaking gear manufacturer Tokyo Electron, attracted buybacks thanks to the yen’s fall.
Among other winners were technology investor SoftBank Group and technology and entertainment giant Sony.
By contrast, shipping firms fared poorly. Of them, Nippon Yusen sank 3.39 percent and Mitsui O.S.K. 1.50 percent.
Also sold were clothing store chain Fast Retailing and mobile phone carrier KDDI.