Tokyo stocks turned sharply higher Monday, as expectations grew that outgoing Prime Minister Shinzo Abe’s successor will maintain current economic policies.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange rose 257.11 points, or 1.12 percent, to end at 23,139.76, after tumbling 326.21 points Friday.
The Topix index of all first-section issues closed up 13.31 points, or 0.83 percent, at 1,618.18, following an 11.02-point decline the previous trading day.
Stocks rocketed right after the opening bell, fueled by a broad rise in the U.S. market on Friday reflecting brisk economic data.
Sentiment was also brightened by media reports that Chief Cabinet Secretary Yoshihide Suga has decided to run in the ruling Liberal Democratic Party’s race to pick its new head, who would be set to be the next prime minister, brokers said, adding that Suga is expected to continue Abe’s policies.
After the initial spurt, however, the market grew top-heavy, pressured by selling to lock in profits.
“The view spread that the next prime minister will have no choice but to put emphasis on economic policies amid the coronavirus crisis,” an asset manager said.
“Profit-taking by short-term players gained strength in the afternoon, as other participants retreated to the sidelines” to see further political developments in the country, Hirohumi Yamamoto, strategist at Toyo Securities Co., said.
On the TSE’s first section, rising issues outnumbered falling ones 1,605 to 492 with 74 issues unchanged.
Trading houses attracted purchases on media reports that prominent investor Warren Buffett’s Berkshire Hathaway Inc. acquired a stake of more than 5 percent each in the five major Japanese traders of Mitsui, Sumitomo, Mitsubishi, Itochu and Marubeni.
Silicon wafer marker Sumco, test device maker Advantest and other issues in the semiconductor sector advanced after their U.S. peers fared well on Friday.
Among other winners were clothing store chain Fast Retailing and air conditioner maker Daikin.
Meanwhile, cell phone carriers NTT Docomo, KDDI and SoftBank were drove down by the emergence of Suga, who has persistently called for cuts in mobile communications fees, as a major candidate to succeed Abe.
Also on the negative side were convenience store chain FamilyMart and automaker Toyota.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 270 points to end at 23,160.
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