The Nikkei 225 stock average turned sharply higher Monday as investors moved to buy back stocks battered in the recent sell-off, taking a cue from speculation about active purchases by the Bank of Japan and pension funds.
The Nikkei jumped 334.95 points, or 2.02 percent, to end at 16,887.78, On Thursday the key market gauge fell 173.72 points. The market was closed Friday for a national holiday.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 8.79 points, or 0.68 percent, higher at 1,292.01 after rising 12.38 points Thursday.
Stocks went up in the early morning after the three-day weekend but quickly lost steam as concerns over the coronavirus pandemic remained strong.
But in the afternoon, the market headed for higher ground, with participants detecting signs of purchases of exchange-traded funds by the central bank and cash stocks by pension funds, brokers said.
The Nikkei staged a much sharper rebound than the Topix thanks to active buybacks of heavily weighted component issues of the key index, such as technology investor SoftBank Group and industrial robot producer Fanuc, they noted.
“Robust buying of wide-ranging issues particularly by pension funds pushed up the market,” said Hiroaki Kuramochi, chief market analyst at Capital Partners Securities Co.
“Short-term players, such as hedge funds, moved to buy back some mainstay issues that were seen severely oversold recently,” a brokerage house official said.
On the first section, rising issues outnumbered falling ones 1,613 to 527 while 26 issues were unchanged. Volume fell to 2.697 billion shares from 3.017 billion Thursday.
SoftBank Group went limit-up to score an 18.61 percent gain after announcing plans to buy a huge amount of own shares and sell assets.
Power supplier Kyushu Electric extended its winning streak to a fifth session.
Pharmaceuticals including Takeda continued to draw popularity.
Tokio Marine went up along with other insurers.
Meanwhile, department store operators including Takashimaya and Isetan Mitsukoshi had a rough session on a 58 percent plunge in the number of foreign visitors in February.
Also sold were air conditioner maker Daikin and automaker Toyota.