Tokyo stocks bounced back sharply Monday, thanks to buying on dips and a rise in the U.S. index futures, helping the key Nikkei average reclaim 28,000.
The 225-issue Nikkei average of the Tokyo Stock Exchange gained 427.66 points, or 1.55%, to close at 28,091.05, after diving 534.03 points on Friday to close below the psychologically important 28,000 threshold for the first time since Jan. 7.
The Topix index of all first section issues closed 21.06 points, or 1.16%, higher at 1,829.84 following a 30.07-point drop previous trading day.
The Tokyo market started out in negative territory, weighed down by drops in all three major U.S. stock indexes, including the Dow Jones Industrial Average, on Friday and a fall in Dow futures in off-hours trading Monday, against the backdrop of fears over an unstable U.S. market caused by speculative trading by individual investors.
After the weak start, a wide range of issues on the Tokyo market attracted buying on dips following Friday’s plunge, pushing up both the Nikkei and Topix indexes comfortably into the positive side later in the morning.
The market continued to fluctuate tightly at substantially higher levels in the afternoon, moving in tandem with Dow futures’ rise to the sunny side, with the Nikkei climbing over 400 points.
With Dow futures, as well as West Texas Intermediate crude oil futures, seen as an indicator showing investors’ growing risk appetite, moving in positive territory in off-hours trading, the market’s concerns over a possible plunge “receded rapidly,” an official at a bank-affiliated securities firm observed.
Still, trading, in general, was thin as “investors wanted to wait and see how the U.S. market will move later on Monday,” Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said.
In the TSE first section, gainers outnumbered losers 1,336 to 769, while 86 issues were unchanged. Volume decreased to 1.145 billion shares from Friday’s 1.576 billion shares.
Toilet-maker Toto and parcel delivery firm Yamato Holdings attracted active buying thanks to upward revisions to their operating profit forecasts for the year ending in March.
Online fashion retailer Zozo went limit-up after its revised operating profit forecast beat the market consensus.
Among other major winners were technology investor SoftBank Group and clothing store chain Fast Retailing.
Despite revising up their earnings forecasts for the year ending in March, electronic parts producer TDK and electronic parts supplier Murata Manufacturing succumbed to profit-taking after their recent rises.
Seasoning producer Ajinomoto and railway operator JR East also fell.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average advanced 570 points to end at 28,140.
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