Business / Financial Markets

Tokyo stocks rise on hopes for pandemic-related stimulus

JIJI

Tokyo stocks extended gains Tuesday thanks to a sharp Wall Street rally and expectations for Japanese measures to cushion the impact of the coronavirus crisis on the economy.

The Nikkei 225 average soared 373.88 points, or 2.01 percent, to end at 18,950.18 after leaping 756.11 points Monday.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, advanced 26.91 points, or 1.96 percent, to 1,403.21 following a 51.17-point jump Monday.

A wide range of issues attracted purchases from the outset, after the Dow Jones Industrial Average rocketed 7.73 percent on the New York Stock Exchange on Monday.

Investors turned less risk-averse in view of drops in the daily number of deaths from the coronavirus in New York state and some European countries on Sunday, brokers said.

The vigorous early morning buying, which pushed up the Nikkei by more than 580 points, also reflected expectations for the Japanese government’s ¥108 trillion stimulus package to help prop up people and businesses during the pandemic.

But the market soon lost steam and gave up all gains by the early afternoon, as profit-taking became active after the Nikkei retook 19,000, an official at a domestic securities firm said.

In late afternoon trading, both the Nikkei and Topix rose again on buying induced by a halt in the decline in U.S. stock index futures.

“Short-covering buybacks drove up the market while institutional investors remained low key,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.

“Institutional players cannot make major moves until they figure out the pandemic’s specific effects on corporate earnings,” he said.

On the first section, rising issues far outnumbered falling ones 1,877 to 255, while 36 issues were unchanged. Volume increased to 1.703 billion shares from 1.679 billion Monday.

All of the 33 subsector price indexes posted rises.

Chipmaking gear manufacturer Tokyo Electron, test device maker Advantest and other issues in the semiconductor sector were hunted after their U.S. peers fared well Monday.

Export-oriented issues, such as Toyota and Sony, went up thanks to the coronavirus situation in their overseas markets showing signs of some improvement.

Among other winners were SoftBank Group and Fast Retailing.

Meanwhile, Aeon lost ground after rising sharply the previous day.

Also on the negative side were KDDI and Kao.

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