Tokyo stocks staged a sound rally Friday, with buying sentiment boosted by upturns in U.S.and European markets.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange climbed 252.29 points, or 1.13 percent, to end at 22,512.08, bouncing back from a 274.53-point fall on Thursday.
The Topix index of all first-section issues closed 15.52 points, or 0.99 percent, higher at 1,577.37, after giving up 18.65 points the previous day.
Investors moved to buy back stocks from the outset, taking heart from all major U.S. market indicators turning higher Thursday in response to relaxation of the Volcker Rule and other financial safeguards adopted after the global financial crisis triggered by the U.S. subprime housing loan crisis, which brought down investment banks Lehman Brothers and Bear Stearns in 2008, brokers said.
Sentiment was also brightened by a climb in European stocks following the European Central Bank’s decision to set up a backstop facility to provide precautionary euro liquidity to central banks outside the eurozone to cope with possible market dysfunction resulting from the novel coronavirus pandemic.
But vigorous buying proved short-lived amid a lack of fresh trade incentives, although the market remained buoyant for the rest of the session, brokers said.
“Investors took to the sidelines” ahead of the Bank of Japan’s tankan quarterly business sentiment survey for June, which is due Wednesday, and other data, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.
“Trading was thin with the Shanghai market’s closure until Friday causing a dearth of incentives for players,” he added.
On the TSE’s first section, rising issues overwhelmed falling ones 1,614 to 496 while 58 issues were unchanged. Volume decreased to 1.137 billion shares from Thursday’s 1.305 billion shares.
Financial issues, including mega-bank Mitsubishi UFJ and leading brokerage Nomura Holdings, capitalized on their U.S. peers’ advance Thursday.
Electronics maker Fujitsu soared 5.05 percent after Tokai Tokyo Research Institute Co. made an upward revision to its target stock price for the firm.
Technology investor SoftBank Group leaped 3.04 percent after it announced a plan to buy back its own shares.
Nissan Chemical and chip test device maker Advantest were in the green as well.
On the other hand, major losers included technology and entertainment giant Sony and daily goods producer Kao.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average gained 200 points to end at 22,420.