Tokyo stocks advanced Monday, thanks to rosy Bank of Japan data and hopes for novel coronavirus vaccines.

The key 225-issue Nikkei average of the Tokyo Stock Exchange climbed 79.92 points, or 0.30%, to close at 26,732.44, after a 103.72-point fall Friday.

The Topix index of all first section issues was up 8.51 points, or 0.48%, to end at 1,790.52, after rising 5.80 points the previous trading day.

The market made a strong start, supported by buying on dips and buybacks reflecting a rise in U.S. Dow Jones Industrial Average futures in off-hours trading.

Buying was also fueled by better-than-expected results of the BOJ's tankan quarterly business sentiment survey for December.

According to the survey, released just before the opening bell, the headline diffusion index for large manufacturers' current business conditions stood at minus 10, compared with minus 27 in the previous tankan for September, improving for the second straight quarter. The latest reading was better than the average forecast of minus 14 among 19 economic research institutes surveyed by Jiji Press.

Investor sentiment was also brightened by news reports that shipments of a coronavirus vaccine developed jointly by U.S. drug giant Pfizer Inc. and German biopharmaceutical company BioNTech SE started in the United States on Sunday and that vaccination is expected to begin Monday, brokers said.

In the afternoon, both the Nikkei and Topix indexes gave up part of their earlier gains and fluctuated in narrow ranges.

"With policy-setting meetings by the U.S. Federal Reserve and the BOJ scheduled this week, a wait-and-see mood grew strong on the market," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said, referring to Monday's generally lackluster trading.

Some market sources noted that investors will be closely watching the vaccine distribution situation in the United States.

On the TSE first section, gainers outnumbered decliners 1,333 to 755 while 92 issues were unchanged. Volume fell to 1.153 billion shares from Friday's 1.282 billion shares.

Mitsubishi Heavy surged 7.55% following news reports that the company will lead a project to develop a next-generation fighter jet for Japan's Self-Defense Forces while receiving technical assistance from Lockheed Martin Corp. of the United States.

AGC rose 2.96% after Mitsubishi UFJ Morgan Stanley Securities Co. raised its target stock price for the glass maker.

Automaker Toyota was up 1.69%, extending its winning streak to a fourth market day, following the launch of its second-generation Mirai fuel cell vehicle in Japan last week.

Electronic parts supplier Taiyo Yuden and system integrator NTT Data also went up.

On the other hand, medical equipment maker Terumo and game-maker Konami were among major losers.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 170 points to 26,690.

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