Business / Financial Markets

Nikkei logs 353-point rebound on optimism for economy's reopening

Jiji

Tokyo stocks bounced back on Monday, thanks to economic expectations for the full lifting of the state of emergency imposed for the coronavirus outbreak.

The Nikkei average of 225 selected issues on the first section of the Tokyo Stock Exchange gained 353.49 points, or 1.73 percent, to end at 20,741.65. On Friday, the key index lost 164.15 points.

The Topix index of all first-section issues closed up 24.40 points, or 1.65 percent, at 1,502.20, after shedding 13.41 points the previous trading day.

The market got off to a strong start with buybacks gathering steam ahead of the government’s expected removal Monday of the coronavirus emergency kept in place in Tokyo and four other prefectures, brokers said.

Although profit-taking pressure grew around the midmorning, stocks picked up again on renewed buying toward noon and maintained strength for the rest of the day.

The market was also underpinned by a rise in U.S. Dow Jones futures in off-hours trading, the brokers added.

“Hopes that economic activities will restart throughout Japan prevailed on the market as the end of the emergency loomed,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.

Maki Sawada, vice president of Nomura Securities Co.’s Investment Research & Investor Services Department, noted that investors also took heart from the top U.S. infectious-disease expert’s remarks on Friday that full results of a clinical trial of Moderna Inc.’s promising coronavirus vaccine would be released within a few weeks and that the vaccine could be available within a matter of months.

Meanwhile, Ichikawa pointed out that trading was lackluster because foreign players were dormant before the Memorial Day holiday in the United States.

On the TSE first section, rising issues overwhelmed falling ones 1,857 to 259 while 54 issues were unchanged. Volume fell to 1.002 billion shares from Friday’s 1.229 billion shares.

Airlines JAL and ANA rocketed 9.41 percent and 7.59 percent, respectively, boosted by hopes for a recovery in passenger demand.

Ushio was lifted 2.10 percent by a media report that the lightning equipment maker will start mass-producing an antiviral ultraviolet lamp.

Among other major winners were electronic device maker Casio and clothing store chain Fast Retailing.

On the other hand, Fujifilm Holdings dropped 2.77 percent as its operating profit for the year that ended in March failed to beat a market consensus.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average jumped 460 points to end at 20,820.

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